BackText onlyPrint

You need the Flash plugin.

Download Macromedia Flash Player



Location: Bahrain Bourse (BHB) Material
  • Bahrain Bourse (BHB) Material

    • BHB Internal Regulation

      • Resolution No. (14) of 2006 with respect to amending the internal regulations of BHB (Arabic)

        Click here to download the Arabic version of Resolution No. (14) for the year 2006 in PDF format.

      • Resolution No. 13/1988 On the Issuance of Internal Regulation for the Bahrain Stock Exchange

        The Minister of Commerce and Agriculture:
        Having perused Decree No. 28/1975 regarding the issuance of the Commercial Companies Law and the amendments thereof,
        And Decree No. 7/1987 regarding the issuance of the Law of Commerce,
        And Decree No. 4/1987 regarding the Establishment and Organization of the Bahrain Stock Exchange,
        And upon the proposal of the Bahrain Stock Exchange Board of Directors,

        HAS RESOLVED AS FOLLOWS:

        RESOLVED:

        ARTICLE 1

        The provisions of the Internal Regulation of the Bahrain Stock Exchange, attached herein, shall be applied.

        ARTICLE 2

        This Resolution and accompanying Internal Regulation shall be published in the Official Gazette, and shall take effect from the date of publication.

        Minister of Commerce and Agriculture Chairman
        of the Bahrain Stock Exchange Board of
        Directors Habib Ahmed Qassim

        Issued on 15 Jumadi Alowla 1409 Hijri
        Corresponding to 24 December 1988

      • The Internal Regulation

        • Chapter 1 Definitions

          • Article 1

            In the application of this Regulation, the following words and expressions shall have the corresponding meanings:

            The "State": shall mean the State of Bahrain.
            "Law": shall mean the Law of the Bahrain Stock Exchange.
            "Regulation": shall mean the Internal Regulation of the Bahrain Stock Exchange.
            "Minister": shall mean the Minister of Commerce and Agriculture.
            "Exchange": shall mean the Bahrain Stock Exchange.
            "Board of Directors": shall mean the Exchange's Board of Directors.
            "Chairman": shall mean the Exchange's Chairman of the Board of Directors.
            "Director": shall mean the Director of the Exchange.
            "Brokerage": shall mean the endeavours of authorized brokers to procure the execution of contracts for the sale, mortgage, or transfer by way of a gift, of companies' shares and provisional certificates representing such shares and bonds, and the performance dealings in any securities on behalf of others; or any other functions that may be determined by the Board of Directors, against a commission.
            "Broker": shall mean a person licenced by the Board to carry out brokerage services regarding securities traded on the Exchange, and the person who carries out brokerage services on behalf of a company licenced by the Board to carry out brokerage services relating to securities traded on the Exchange.
            "Assistant Broker": shall mean the person employed by a broker or a brokerage firm. Such a person may assist the broker in carrying out any brokerage duties associated with dealing in securities. The broker may appoint one or more of his representatives as assistant brokers, subject to the approval of the Exchange's administration.
            "Market Making": for the purpose of implementing the provisions of the Law, market making shall mean the endeavours of natural or legal persons licenced by the Board to execute deals for their own account, with a view to creating a continuous market on securities, in accordance with the rules and regulations issued by the Board in this respect.
            "Market Makers": market makers subject to the provisions of the law, shall mean the natural or legal persons, licenced by the Board to deal for their own account as market makers on the Exchange's Floor. Such market makers shall not be entitled to mediate in the conclusion of deals for the account of third parties.
            "The Floor": the place designated in the Exchange building for the execution performance of securities sale and purchase of securities, in accordance with the provisions of the Law and this Internal Regulation.

        • Chapter 2 Establishment and Objectives of the Exchange

          • Article 2

            The Bahrain Stock Exchange shall have its own independent legal entity, with the authority to dispose and manage its properties, and the right to sue and be sued, in a manner that enables it to achieve the objectives of its organization in the best way, in accordance with the Rules and Regulations relating to the operations of the Exchange.

          • Article 3

            The objectives of the Exchange shall include the following:

            Firstly:

            1— To develop the Stock Market in a manner which serves the economic development and assists in realizing the economic policy objectives of the State. This is achieved by providing the necessary facilities for developing the local, regional and international markets, and allowing the listing of non-Bahraini companies on the Exchange, or accepting dealings in shares issued by them.
            2— To encourage savings and enhance the citizens' awareness in investment, with a view of directing these savings to more productive sectors.
            3— To develop and rationalize the dealing methods on the Exchange, with a view to avail liquidity, continuity, fairness and sound dealing, in order to maintain control and achieving the benefit and provide proper protection for investors on the Exchange.
            4— To develop the Exchange in a manner that supports the financial position of the State of Bahrain, through the development of the financial institutions and investment instruments traded on the Exchange.

            Secondly:

            1— To supervise the issuance of securities on the capital market on the stage of initial offerings or at the amendment of capital on coordination with the concerned authorities.
            2— To provide the necessary facilities to enhance the dealing in securities admitted for trading on the Exchange, in accordance with the Law. Such securities may be local, regional or international, as determined by the Board.
            3— To provide the necessary finance to support the requirement of the economic and social development.

            Thirdly:

            To establish and develop links with other regional and international exchanges, in order to benefit from their experience to develop the local market.

        • Chapter 3 Administration of the Stock Exchange

          • First: Board of Directors

            • Article 4

              The Exchange shall be managed by a Board of Directors, chaired by the Minister of Commerce and Agriculture. The Board shall comprise of:

              1— A member representing the Ministry of Commerce and Agriculture, who shall be the Deputy Chairman.
              2— A member representing the Ministry of Finance and National Economy.
              3— A member representing the Bahrain Monetary Agency.
              4— Three experienced and competent members to be appointed by the Bahrain Chamber of Commerce and Industry.
              5— Two members representing the national banks, and auditing and accounting firms, to be appointed by the Chairman.

            • Article 5

              The Board of Directors shall exercise all necessary powers and authority to manage the Exchange, and in particular shall be responsible for the following:

              1— To formulate the general policies and strategies of the Exchange.
              2— To issue the regulatory rules for trading in securities, and to set forth rules, procedures and regulations governing the issuing, listing and trading of debt instruments, and determine the prescribed fees.
              3— To nominate the Director of the Exchange, whose appointment and remuneration shall be determined by a resolution of the Prime Minister.
              4— To consider applications for the registration of brokers and market makers, and listing of joint stock companies shares, or approving the trading of any other securities on the Exchange, in accordance with the conditions stipulated by the Board in accordance with a resolution to be issued by the Minister.
              5— To approve the Exchange's budget and final accounts.
              6— To appoint the auditors.
              7— To take the necessary action in respect of transactions suspected of being irregular, in accordance with the provisions of the Law, the Internal Regulation and resolutions of the Exchange.
              8— To temporarily suspend trading on the shares of one or more companies, on the occurrence of any exceptional circumstances which threaten the proper conduct and control of the business of the Exchange.
              9— To form specialized committees from members of the Board, whether permanent or on a temporary basis, as the Board deems fit.
              10— To prepare drafts of laws and regulations relating to the business of the Exchange, and determines its objectives.
              11— To approve the instructions issued by the Director, with respect to the organization of the Exchange and the management of its affairs.
              12— To determine the transport and travel allowances for the members of the Board when they are assigned for missions related to the Exchange's business.
              13— To appoint advisors to the Exchange, and fix their terms of service. The Board may delegate this authority to the Director.
              14— To approve the appointment of the Exchange's employees, as nominated by the Director.
              15— To determine the working hours and trading days at the Exchange's Trading Floor, according to the circumstances.
              16— To determine, increase or decrease the brokers' commissions, in accordance with the requirements of the Exchange and the nature of work. Such commissions shall be adopted by a resolution from the Minister.
              17— To impose fines on members defaulting members of the Exchange and on listed and unlisted companies as well.
              18— To determine the sources of the Exchange's income.
              19— Any other important matters, in order to ensure the Exchange's business is conducted in a proper manner for the realization of its objectives.

            • Article 6

              Meetings of the Board of Directors shall be held upon the Chairman's invitation, provided that the number of meetings shall not be less than six each year. The invitation for the meeting shall be served at a sufficient time before the prescribed date for the meeting accompanied by the agenda. The Board must be called to convene upon the request of at least four board members. However, for urgent purposes, the Board may be called upon to convene by telephone.

            • Article 7

              The meeting of the Board will only be valid if attended by the majority of the members, including the Chairman. Resolutions shall be adopted by majority vote of the members present, and in the event of matching votes, the Chairman shall have a casting vote. Resolutions shall be duly recorded in a register, to be signed by all members present at the meeting. Voting by proxy or by correspondence shall not be permitted.

            • Article 8

              The Chairman shall preside over the Board's meetings, maintain order, supervise the voting process and declare the result thereof. The Deputy Chairman shall replace the Chairman in his absence.

            • Article 9

              In exceptional urgent situations, where the Chairman deems it necessary to decide on issues within the powers of the Board of Directors, the Chairman may pass the required resolutions if the Board could not meet. The issued resolution shall be submitted for ratification by the Board at its next meeting. The Board may ratify, amend, or reverse such resolutions.

            • Article 10

              The Board may constitute from amongst its members, permanent or temporary committees and determine their authority. The Board and the constituted committees may invite any person to listen to their views on a particular matter. Such persons shall not be entitled to vote.

            • Article 11

              The Board may constitute advisory and other types of committees, as deemed necessary to satisfy the various requirements of the Exchange, and in particular for the following purposes:

              1— To propose ways and means for developing the Exchange.
              2— To find and prescribe the necessary regulations, in order to combat fraudulent and deceptive acts, and acts which affect the Exchange.
              3— To determine the proper principles and standards to be adopted in accounting and auditing spheres.
              4— To determine all requirements regarding the publication of information relating to the companies.

              The Board shall determine the methods of appointing these committees and the exercise of their authorities.

          • Second: The Director

            • Article 12

              The Exchange shall have a full-time Director, who shall have all the necessary powers required for the management of the Exchange, and the implementation of the Exchange's internal rules and regulations. The Director shall submit to the Board the proposals, regulations, studies and instructions as he deems fit. He shall supervise the technical, administrative and financial departments of the Exchange, and shall issue the necessary instructions in order to perform the duties and responsibilities as delegated to him by the Law, Internal Regulation and resolutions of the Board.

              The Director shall be responsible for maintaining order during the trading sessions, and shall have the power to take the necessary measures to expel any person who disturbs the order during trading sessions in the Floor.

              The Director shall also be responsible for the implementation of the resolutions adopted by the Board. The Director is the legal representative of the Exchange before the Courts of Law, and in its relations with others, and is entitled to sign on behalf of the Exchange.

            • Article 13

              1— The employees of the Exchange shall be appointed upon the nomination of the Director and the approval of the Board.

              The Rules and Regulation applicable to government employees shall apply to the Exchange's employees, until special rules and Regulations applicable to them are issued.
              2— The management of the Exchange shall endeavour to develop and train the staff required to manage the Exchange, in accordance with modern administration and Technical methods, This shall include also brokers, market makers and other individuals who perform similar functions. The management shall also promote investment awareness amongst those who deal in securities on the Exchange.

            • Article 14

              The main functions of the Exchange shall be carried out by various specialized technical and administrative departments, which include:

              1—The Operations Department: shall be responsible for the implementation of the trading, clearing and settlement rules, and the follow-up on the trading movement, monitoring the securities prices and their attitudes and, following-up the members affairs. The department is also responsible for monitoring the movement of trading in futures, and proposing suitable basis and rules for the organization of trading in futures operations in terms of size, term, prices and attitudes as compared to spot prices.
              2— The Administration and Finance Department: shall be responsible for following-up all matters relating to the revenues and expenditures of the Exchange, satisfying all its purchasing needs, and following-up the employees affairs and their training.
              3— The Studies, Research and Development Department: shall be in charge of all matters relating to the studies, research and financial analysis of the listed companies, and the publication of information relating to the Exchange. The department shall also be responsible for the projection of the trading and price movements and their impact on the economic position of the country. It shall submit proposals for the development of different regulations applicable on the Exchange, and shall collect and analyze information relating to the Exchange, securities and companies, prepare studies, and issue daily bulletins about the transactions and prices.
              4— The Control and Investigation Department: shall be responsible for the preparation of draft resolutions and laws for the Exchange, follow-up implementation of the Judgements passed by the Exchange, inspection of the Exchange's members and verifying the accuracy of the information and statements issued by the companies and members. It shall also investigate any disputes brought before the arbitration committee and the disciplinary board, and any other matters referred to it by the Director.

              The Board may establish other departments in the Exchange, to assist in achieving its objectives.

        • Chapter 4 Membership of the Exchange

          • Article 15

            The membership of the Exchange shall include:

            1— Natural and legal stockbrokers.
            2— Natural and legal market makers.
            3— Any other natural or legal person to be admitted as a member.

          • Article 16

            First: Natural person:

            A natural person can be admitted as a broker or market maker subject to the following conditions:

            1— He should be a Bahraini national, resident in Bahrain, with the exception of brokers or market makers who are licensed to practice brokerage or market making business in securities, prior to the implementation of the Bahrain Stock Exchange Law and the Internal Regulation.
            2— The broker should carry out brokerage business on a full-time basis.
            3— The broker or market maker, must submit to the Exchange final accounts and an annual balance sheet audited by a licensed auditor in accordance with the applicable standards within three months prior to the financial year-end, and shall submit also half-yearly accounts reviewed by a licensed auditor. The Exchange shall have the right to ask, from time to time, for the said documents and information, as and when they are needed (1).
            4— He should not be less than twenty-five years of age.
            5— He should be of good conduct and behaviour.
            6— He should not have been declared bankrupt in Bahrain or abroad, nor previously convicted for a crime and/or by punishment restricting his freedom, or for a crime affecting his integrity or honesty, unless he has been reinstated in all respects.
            7— His educational qualifications should not be less than the secondary school certificate or its equivalent. Alternatively, he must be experienced in financial or commercial matters, to an extent that is acceptable to the Board. The Board may amend or add any other qualifications as it deems fit.
            8— He shall participate in the Guarantee Fund during his membership in the Exchange's Clearing, Settlement and Central Depository, with a minimum amount of BD10,000.(2)
            9— The capital of the market maker should not be less than BD100,000 and the Board may stipulate a higher minimum capital requirement for individual dealers.
            10— The broker or market maker shall be obliged to pay all his financial obligations, including fees and commissions payable to the Exchange.
            11— He should be registered with the Ministry of Commerce and Agriculture, and be a member of the Bahrain Chamber of Commerce and Industry.
            12— He should be aware of the trading and clearing rules applicable on the Exchange.
            13— A broker or market maker should not transfer or sell the brokerage or market making licence to any other person, without a prior consent of the Board.
            14— He should comply with all other conditions, stipulated by the Board.

            Second: Legal person

            An entity licensed to carry out brokerage or market making activities shall comply with the following conditions:

            1— It should be a Bahraini joint stock company or a limited liability company, whose shareholders are all of Bahraini nationality. The following companies shall be exempted from the above conditions:
            a— companies permitted to carry out brokerage or market making activities in accordance with the provisions of Legislative Decree No. (18) of 1975, in respect of the Commercial Companies and their organization.
            b— branches of foreign companies and exempt companies which carry out brokerage and market making activities on international securities.
            2— The company shall exclusively carry out brokerage or market making activities on securities. It may perform other related activities with the approval of the Board.

            As an exception to Article (16) Clause (1) above, foreign brokerage companies may be licensed to undertake the business of securities brokerage or market making on the Exchange, provided that the concerned company should have distinguished experience in the field of securities, deems to enrich the brokerage profession on the Exchange, that could add international dimension to the profession and contribute towards attracting foreign investors.

            The same conditions stipulated in the Exchange's Internal Regulation for the admission of Bahrain brokerage companies member at the Exchange shall be applied to foreign brokerage companies subject to the provisions of Article (16) second, in addition to any other conditions specified by the Exchange's Board of Directors(3).
            3— Brokerage companies and market making companies must submit to the Exchange final accounts and an annual balance sheet audited by a licensed auditor in accordance with the applicable standards within three months prior to the financial year-end and shall submit also half-yearly accounts reviewed by a licensed auditor. The Exchange shall have the right to ask, from time to time, for the said documents and information, as and when they are needed(4).
            4— The employees performing brokerage and market making functions on behalf of their companies must satisfy the following conditions:
            a— In respect of the employees in Bahraini companies: he should be a Bahraini national, with educational qualifications of not less than the Investment Representatives Programme Certificate (previously series seven) and a secondary school certificate or equivalent thereof, or alternatively, possess adequate experience in financial and commercial matters, acceptable to the Board.

            He should also be of good reputation and exclusively perform his duties on a full-time basis(5).
            b— In respect of non-Bahraini companies, branches of foreign companies and exempt companies:

            The persons performing brokerage and market making functions may be non-Bahraini with academic qualifications of not less than Investment Representatives Programme Certificate (previously series seven) and a university degree or the equivalent thereof or alternatively should possess sufficient experience in financial and commercial matters acceptable to the Board. He should be of good reputation and exclusively perform his duties on a full-time basis. The Board may amend or add to these qualifications, as it deems fit(6).

            As an exception to Article (16) Clause (1) above foreign brokerage companies may be licensed to undertake the business of securities brokerage or market making on the Exchange, provided that the concerned company should have distinguished experience in securities, deems to enrich brokerage profession on the Exchange, that could add international dimension to the profession and contribute towards attracting foreign investors.

            The conditions of the acceptance of natural and legal persons as brokers or market makers on the Exchange stipulated in Article (16) of the Exchange's Internal Regulation shall be applied to the non-Bahraini brokers or market makers, in addition to any other conditions to be prescribed by the Exchange's Board of Directors(7).
            5— The company, its manager, partners who are authorised to manage the company or those who assume brokerage or market making functions in the company, should not have been declared bankrupt in Bahrain or abroad, or been convicted of an offence, or punishment restricting his freedom or for a crime affecting his integrity or honesty, unless he has been reinstated.
            6— The minimum capital of the brokerage company shall be BD30,000 for limited liability companies, and BD200,000 for joint stock companies.

            The Board may increase the minimum capital at any time.
            7— Companies shall during their membership in the Exchange's Clearing, Settlement and the Central Depository participate, in the Guarantee Contribution Fund with a minimum amount of BD.50,000(8).
            8— The minimum capital for a market making company shall be BD200,000. However, the Board may increase it.
            9— The company shall be registered with the Ministry of Commerce and Agriculture and a member of the Bahrain Chamber of Commerce and Industry as well.
            10— The company's representative should have adequate knowledge of the trading and settlement rules applicable on the Exchange.
            11— Any brokerage or market making company should not transfer or sell its brokerage or market making licence to any other company, without the prior consent of the Board.
            12— The company shall satisfy any other conditions, stipulated by the Board.

            (1) Amended by the Ministerial Resolution No. 1/1999

            (2) Amended by Ministerial Resolution No. 4/2000 with respect to the establishment of a Guarantee Contribution Fund at the Bahrain Stock Exchange.

            (3) Innovated by Resolution No. 4/1999, Amending certain provisions of the Bahrain Stock Exchange's Internal Regulation.

            (4) Amended by Resolution No. 1/1999.

            (5) Amended by Resolution No. 2/1999.

            (6) Amended by Resolution No. 2/1999.

            (7) Amended by Resolution No. 4/1999. In respect of amending certain provisions of the Bahrain Stock Exchange's Internal Regulation.

            (8) Amended by Resolution No. 2/2000 in respect of the establishment of the Exchange's collective Guarantee Fund.

          • Article 17

            Brokers registered with the Ministry of Commerce and Agriculture at the time of the issuance of this Internal Regulation, shall apply to the Exchange management within three months from the date this Internal Regulation come into force, for a new licence for undertaking brokerage in securities, in accordance with the terms prescribed in the preceding Article.

          • Article 18

            The application for obtaining a brokerage licence shall be submitted to the Exchange's management, accompanied by all documents establishing compliance with the conditions stipulated in Article 16. The management shall review the applications and make its recommendations to the Board for taking a decision thereupon, which shall be final. Any person whose application has been rejected may appeal against such a decision before the Civil High Court, within sixty days from the date of his notification of such rejection or taking cognizance thereof.

            The Board shall, from time-to-time determine the number of brokers, subject to the Exchange's need.

          • Article 19

            Brokerage commission for undertaking brokerage services on the Exchange shall be as follows:

            i— A fee of 0.03% (three over one thousand) for the first BD20,000 or less.
            ii— A fee of 0.2% (two over one thousand) for amounts exceeding BD20,000 and up to BD50,000.
            iii— A fee of 0.1% (one over one thousand) for amounts exceeding BD50,000.

            The commission stipulated above shall be considered the base for calculating the Exchange's commission and a broker may charge more or less than the above prescribed commission(1).

            The Exchange's commission shall be 20% of the broker's commission chargeable for trading transactions executed in the Trading Floor and according to the above commission categories.

            A broker may receive commission from each of the parties of the contract in which he mediated to its conclusion. Each contracting party shall be liable for the payment of commission owed by him to the broker. A broker shall be entitled to payment of commission upon the conclusion of the contract. Such commission shall become payable immediately upon conclusion of the contract, irrespective of whether it has been fully or partially performed.


            (1) Amended by Ministerial Resolution No. 1/2000, in respect of defining the broker's commission at the Bahrain Stock Exchange.

          • Article 20

            1— A broker shall conclude all deals for himself, his wife, or one of his relatives of the first degree through another broker, in compliance with the terms stipulated by the Board.
            2— A broker may not act as an agent as well as a broker in any contract he mediates to conclude.

          • Article 21

            Brokers shall undertake to provide all information, particulars, statistics and documents required by the Exchange's management on the form, and at the dates prescribed by the management. The Exchange's management may verify the accuracy of the information and particulars by any method it deems fit.

          • Article 22

            1— A broker shall be prohibited from inducing investors, or procuring clients in a way that may be detrimental to the reputation of the brokerage profession.
            2— A broker shall inform the Exchange's management before publishing any advertisement for himself or his work through any means of communications.

          • Article 23

            A broker shall not conclude any deal in securities before verifying that the relevant share certificate is in the possession of the holder, or his legally appointed representative. In the absence of such share certificates, the broker shall require the concerned parties to obtain a certificate from the issuer, showing the number of shares held and confirming that the share certificate is in the issuer's possession, which certificate is neither mortgaged, attached or lost, or a replacement thereof has been issued.

            The broker is barred from concluding deals in disputed securities, or payment of any value of such securities before executing the selling order in the Trading Floor, in compliance with the Exchange's rules and regulations.

          • Article 24

            Brokers shall act on behalf of investors in securities, in compliance with the instructions received from such investors. They should check the identity of the investor, the accuracy of the orders, and the investor's possession of the necessary securities or funds for the soundness of trading.

          • Article 25

            Brokers shall maintain commercial books and records for the registration of all transactions and deals undertaken by them according to their respective dates and times, in the manner prescribed by the Exchange's management. Such books and registers shall be approved by the Exchange's management and shall be subject to its supervision.

          • Article 26

            A broker shall inform the Exchange's management before executing any sell or buy order of a certain type of security as a block to a single investor, if the value of such exceeds the limit prescribed by the Board.

          • Article 27

            A broker may not accept an authorization from any person, if he knows that such a person has appointed another broker for the sale or purchase of the same shares during the prescribed period for trading in those securities.

          • Article 28

            The Board may, as it deems fit, determine the percentage of increase or decrease in the prices of securities during the trading period.

          • Article 29

            The Board shall determine the rules and procedures for trading of securities on the Exchange in accordance with resolutions to be issued by the Board.

          • Article 30

            The trading of securities on the Exchange Floor shall be carried out in accordance with the Resolution No. 4/1999 of the Electronic Trading rules and procedures(1).


            (1) Amended by the Minister of provisional Resolution No. 4/1999.

          • Article 31

            Trading transactions pursuant to Court's orders or resolutions adopted by the companies boards of directors, shall be executed in public auctions in the Exchange Floor in accordance with the rules and procedures prescribed by the trading system.

          • Article 32

            A member shall be struck off the members' register for any of the following reasons:

            1. If he fails to meet any of the conditions provided for in Article 16 of this Internal Regulation.
            2. Dismissed by a disciplinary decision.
            3. Failed to pay the registration fee, annual subscription fee, or the Exchange's commissions.
            4. If he did not replenish the bank guarantee during the period specified by the Exchange's management.
            5. If he committed a gross breach of any of the duties or obligations provided by the Exchange's Law or the Internal Regulation.
            6. If he is declared either bankrupt or deceased.
            7. If he decided to abandon the profession for good, provided that he should submit a written application to that extent three months prior to ceasing activities.
            8. If the company has been dissolved by liquidation, or by expiry of its duration.

            The Board shall issue a resolution deleting the company from the Exchange's membership.

          • Market Makers

            • Article 33

              No person may carry out the business of market making (dealing in securities), pursuant to Exchange Law and its Internal Regulation, unless he obtains a licence from the Board. The market maker may be a natural or legal person, who must satisfy the conditions provided for herein.

            • Article 34

              The Exchange's management shall review the applications submitted for carrying out the business of market making, and submit its recommendation to the Board for the decision. The decision of the Board in this respect shall be final. The applicant whose application has been rejected shall have the right to appeal against the decision before the Civil High Court within 30 days from the date of notification of such a decision.

            • Article 35

              The Board shall determine the number of market makers, who shall be bound to submit all data, information, particulars and documents required by the Exchange's management subject to the form and on the specified date. The Exchange's administration shall verify the accuracy of such particulars and information, by any means it deems fit.

        • Chapter 5 Listing and Admission for Trading

          • Article 36

            Trading in listed securities, or securities admitted for trading on the Exchange, shall be carried out on the Trading Floor through one of the brokers registered on the Exchange.

            The following transactions shall be exempted from trading in the Exchange Floor:

            1— Dealing in securities at the initial subscription stage, including public offering for increasing the capital of joint stock companies.
            2— Dealing in Bahraini joint stock companies' securities on exchanges outside Bahrain pursuant to the Board's permission.
            3— Dealing in securities between spouses or relatives up to the second degree which takes place without consideration.
            4— Transfer of securities in case of inheritance.
            5— Transfer of securities pursuant to a Court order.
            6— Gifts between spouses and relatives (up to the fourth degree).
            7— Transfer of securities in case of a will.
            8— Transfer of securities pursuant to an amicable settlement with a financial institution.
            9— Transfer of securities pursuant to a request from a governmental authority.
            10— Sale of securities by auction.
            11— Sale of securities pursuant to a request from a governmental authority.
            12— Transfer of securities from/to the partners in non-joint stock companies to/from the company, or between the partners.
            13— Transfer of securities between persons whose names are registered in the same certificate as co-owners.
            14— Transfer of securities to/from investment portfolios.
            15— Transfer of financial institution's securities whose Memorandum and Articles of Association do not permit trading in the portion allocated to every party of the shareholders with the other in Bahrain.
            16— Transfer of securities owned by public companies and registered in the names of their directors, and vice-versa(1).

            (1) As amended by Ministerial Resolution No. 8/1993

          • Article 37

            Joint stock companies, whose securities are allowed to be traded on the Exchange are classified into two categories:

            1. Listed companies.
            2. Unlisted companies, whose securities are admitted for trading on the Exchange.

          • Article 38

            Trading on the Exchange shall be limited to the following securities:

            1— Shares of Bahraini joint stock companies, which offer their shares for public subscription.
            2— Shares of foreign joint stock companies admitted by the Board.
            3— Bonds and debt instruments admitted by the Board for listing and trading on the Exchange.
            4— Any other securities admitted by the Board.

          • Article 39

            The listing of joint stock companies' securities shall be subject to the following conditions:

            1— The company must comply with all the terms stipulated by Decree Law No. 28 of 1975, in respect of the Commercial Companies Law, as amended.
            2— The company should have been established for at least two Gregorian years, and issued two audited balance sheets.
            3— The paid-up capital of the company should not be less than BD500,000, or the equivalent in other currencies. And the number of issued shares shall not be less than 500,000 shares. Any additional shares should be at least 50% fully paid-up.
            4— The value of the issued shares of the company in the market should not be less than the paid-up percentage of the nominal value of each share.
            5— The volume of trading in the company's shares shall not be less than the minimum limit prescribed by the Exchange.
            6— The number of shareholders registered in the company's register shall not be less than 100.
            7— The shareholders' rights in the company should rank parri passu regarding each class of shares.
            8— The total net assets of the company should exceed 20% of its paid-up capital.
            9— The total annual turnover should not be less than BD500,000.
            10— The company should have realized profits in two successive years preceding to the date of application.
            11— The company should issue a half-yearly balance sheet.
            12— The company should issue the annual financial reports and the audited financial statements within three months from the end of the company's financial year(1).
            13— The ordinary general meeting must be held at least once every year, within the three months allowing the end of the company's financial year(2).
            14— The company should have a transfer and registration office in Bahrain.
            15— The company should comply with the provisions of the joint stock companies listing agreement.
            16— The financial position of the company should be sound in terms of its assets, liquidity, financial structure and efficiency of performance.
            17— The company should undertake to publish its balance sheet and the results of its operations in the daily newspapers, before its shares are allowed to trade on the Exchange.
            18— Any other conditions, stipulated by the Board from time-to-time.

            (1) Amended by Ministerial Resolution No. 4/1999, amending certain provisions of The Bahrain Stock Exchange Internal Regulation.

            (2) Amended by Ministerial Resolution No. 4/1999, amending certain provisions of The Bahrain Stock Exchange Internal Regulation.

          • Article 40

            The Joint Stock Companies shares will be admitted for trading subject to the following conditions:

            1— The company should comply with all the provisions stipulated in Decree Law No. 28 of 1975, in respect of the Commercial Companies Law, as amended.
            2— The company should have a transfer and registration office in Bahrain.
            3— The company shall comply with the provisions of the agreement pertaining to the admission of joint stock companies shares for trading.
            4— The financial position of the company should be sound in terms of its assets, liquidity, financial structure and efficiency of performance.
            5— The company should issue annual financial reports and audited financial statements within the three months following the end of the company's financial year(1).
            6— The company should publish its balance sheets and the results of its operations in the daily newspapers, before its shares are admitted for trading on the Exchange.
            7— Any other conditions that the Board may prescribe from time to time.

            (1) Amended by Ministerial Resolution No. 4/1999.

          • Article 41

            The Exchange shall have authority to take the necessary proceedings for striking off of any listed or unlisted company, and to notify the company of such decision on the following events:

            1— If the company commits any violation to the provisions of Decree Law No. 28 of 1975, in respect of Commercial Companies Law, as amended, and pursuant to the notification of the Ministry of Commerce and Agriculture.
            2— Subsequent to a merger with other companies and loss of legal status as a result thereof.
            3— Liquidation of the company.
            4— Any major change in the company's main activity.

          • Article 42

            The Exchange shall have the authority to take the necessary proceedings to shift any listed company into an unlisted company whose securities are admitted for trading on the Exchange and to notify the company of such decision on the following events:

            1— If the company loses one of the listing conditions, as provided for in Article 39.
            2— If the company fails to realize profit for two consecutive years.

          • Article 43

            The Exchange shall have the authority to take the necessary proceedings for the suspension of trading in securities of any listed or unlisted company whose securities are admitted for trading on the Exchange, and notify the company of such a decision on the following events:

            1— If the trading volume in the company's shares falls below the limit prescribed by the Exchange.
            2— If the market value of the shares changes, upwards or downwards with regard to the period and percentage prescribed by the Exchange.
            3— Prior to or during the merger process.
            4— If the Exchange realized that misleading information had been directed to it or to the investors.

          • Article 44

            Every joint stock company whose securities are admitted for trading on the Exchange shall undertake to provide the Exchange with information, particulars, documents and statistics lodged with it during the period fixed by the Board in this respect.

            Resolutions adopted by the Exchange shall determine such information, particulars, documents and statistics required by the Exchange in the event of listing and admission for trading on the Exchange, as well as information, particulars, documents and statistics related to the offering of securities for public subscription, in addition to periodic reports and any information deemed to affect the price of such companies' securities on the Exchange.

          • Article 45

            Non-governmental companies which issue debt securities, the maturity of which is one year or more and are offered for public subscription in accordance with the provisions of Decree Law No. 28 of 1975, in respect of the Commercial Companies Law, as amended, should list these debt securities for trading on the Exchange's Trading Floor.

        • Chapter 6 Exchange Finance

          • Article 46

            The Exchange shall have an annual balance sheet, which should be prepared in accordance with commercial model. The Exchange's financial year shall commence on 1st January and end on 31st December of each year. However, the first financial year shall commence on the date of implementation of the Law in respect of the establishment of the Bahrain Stock Exchange, and shall end on the last day of December of the following year.

          • Article 47

            The Exchange's administration shall prepare the budget for revenue and expenses, which shall be approved by the Board at least three months prior to the commencement of the financial year.

          • Article 48

            The Exchange's income shall consist of the following:

            1— Fees imposed on the market.
            2— Revenue of services provided to the market.
            3— Proceeds from investment of the Exchange's funds.
            4— Proceeds of fines and penalties imposed, in accordance with the provisions of the Law and Internal Regulation of the Exchange.
            5— Loans and subsidies provided by the Government or any other party approved by the Board.
            6— Any other income approved by the Board.

          • Article 49

            The Exchange shall have one or more auditors from the chartered accountants registered with the Ministry of Commerce and Agriculture. The auditors shall be appointed and their remuneration shall be determined by a Resolution adopted annually by the Board. The auditors shall audit the accounts of the financial year for which they have been appointed.

            The auditors shall audit the balance sheet, income and expenditure accounts, and shall submit them to the Board, accompanied by their report, for approval within a maximum period of 3 months from the end of the Exchange's financial year.

          • Article 50

            The Exchange shall have a general reserve to which all surplus income realized by the Exchange in any financial year shall be credited. Disposal of such reserve shall be in accordance with the methods prescribed by the Board.

          • Article 51

            The Exchange's administration undertakes to manage expenses in accordance with the estimations stated in the provisions of the budget, and such expenditure proceedings shall be subject to procedures provided by the Financial Internal Regulation issued by the Board.

          • Article 52

            The Exchange's funds shall be utilized in the following manner:

            1— Funds shall be used for the development of the Exchange's systems, and to support the growth of the Exchange through the development of its technical and administrative systems, and by inviting a firm of experts to prepare studies and research, as required for the development of the Exchange's facilities, services and Internal Regulation.
            2— Investment of these funds in one of the low risk investment channels with a view to preserving these funds.
            3— Investment of these funds in the form of deposits in one or more banks, in accordance with the general principles laid down by the Board.
            4— To form reserves for the Exchange.
            5— Any other utilization, as determined by the Board.

          • Article 53

            The subscription fee for members and transfer agents shall be as follows:

            1— A one-off registration fee for individual members is: BD 500
            2— A one-off registration fee for corporate members is: BD 1,000
            3— An annual renewal fee for registration of individual members is: BD 250
            4— An annual renewal fee for registration of corporate members is: BD 500
            5— A one-off registration fee for transfer agents is: BD 500
            6— An annual renewal fee for transfer agents' firms is: BD 1,000

          • Article 54

            Local joint stock companies and exempt companies shall undertake to pay the following fees to the Exchange:

            1— A one-off registration fee of 0.001 of the share capital of each company, subject to a maximum of BD15,000 and a minimum of BD5,000.
            2— The annual listing and admission fees are as follows:
            a— A fee equivalent to 0.001 on the first BD10 million, or less of the company's share capital subject to a minimum of BD30,000.
            b— A fee equivalent to 0.0005 on amounts which exceed BD10 million, up to BD50 million.
            c— A fee equivalent to 0.00025 on amounts which exceed BD50 million of the company's share capital, subject to a maximum of BD20,000(1).

            (1) Amended by Ministerial Resolution No. (2/66) of 1999.

          • Article 55

            The Exchange shall be entitled to the following commissions:

            1— Commission at the rate of 20% on the transactions performed on the Trading Floor(1).
            2— Commission prescribed for transactions exempted from trading on the Exchange:
            a— An equivalent amount to brokers' commission, which shall be one Bahraini Dinar up to the maximum of BD200, on dealing cases stipulated in clause (8, 9) Article (36) of the Internal Regulation.

            The commission for case No. (8) shall be received from the two parties of the trade, and the commission for the case No. (9) shall be received from the transferee.
            b— An equivalent amount to brokers' commission for the case stipulated in clause (5, 10 and 11) Article 36 of the Internal Regulation. In the case No. (5), commission shall be received from the transferee and from the two parties of the trade in the case (10 and 11).
            c— A fixed commission of five Bahraini Dinars for the case stipulated in Clauses (3, 4, 6, 7, 12, 14, 15 and 16) Article 36 of the Internal Regulation.
            d— A fixed commission of one Bahraini Dinar for the case stipulated in the clause No. (13) Article 36 of the Internal Regulation (2).
            3— The Exchange may collect a commission from purchasers. A Resolution in this respect shall be passed by the Board.

            (1) Amended by Ministerial Resolution No. 1/2000.

            (2) Amended by Ministerial Resolution No. 8/1993 in respect of cases exempted from trading.

        • Chapter 7 Disputes and Arbitration

          • Article 56

            An Arbitration Committee shall be established, by a resolution of the Exchange Board and shall be presided over by a judge to be nominated by the Minister of Justice and Islamic Affairs and two members, one of whom must not be a member of the Board. The Committee shall adjudicate on all disputes relating to transactions carried out on the Exchange. Dealing on the Exchange shall be deemed to be an admission of acceptance of arbitration.

            Decisions taken by the Committee shall be binding on both parties, in accordance with the provisions of Article 13 of the Law. The Board shall decide on the remuneration of the members in each arbitration.

          • Article 57

            The Control and Investigation Unit shall receive the arbitration petition submitted to the Exchange by one of the parties to the transaction, subject to arbitration committee jurisdiction, after payment of the prescribed fee in full.

          • Article 58

            The arbitration petition referred to in the preceding Article shall be registered upon receipt in a special register with serial numbers, commencing on the first day of the Gregorian year and ending on the last day thereof. The original petition must be filed with the fee receipt in a special record.

          • Article 59

            The petition shall contain the name, profession, domicile, place of residence, name of principals if the parties are employed by other persons, the relief claimed, and items of evidence establishing the claim. A copy of all supporting documents must be attached and accompanied by a memorandum explaining the dispute.

          • Article 60

            The Control and Investigation Unit shall submit the arbitration petition, upon receipt, to the Chairman of the arbitration committee, in order to fix a date for hearing the dispute. The Unit shall notify all parties of the date of the hearing, along with a copy of the arbitration petition.

          • Article 61

            All documents relating to the arbitration and notices affected by the Control and Investigation Unit shall be sent by registered mail.

          • Article 62

            On the day the dispute is heard, the parties shall be in attendance in person, or be represented by their respective representatives. In the event of non-appearance of one of the parties, the committee shall, if summons was duly served, proceed to issue the decision in his absence.

          • Article 63

            The committee shall decide on the dispute heard by it within a period not exceeding three months.

          • Article 64

            The arbitration committee shall, if required, undertake investigation in disputes heard by it, or may authorize one of its members, or one of the members of the Control and Investigation Unit of the Exchange to carry out the investigation.

          • Article 65

            The arbitration committee shall make its decision on disputes heard before it, based on the evidence produced by the parties, and subject to the rules applicable at the Bahrain Stock Exchange. The decision shall be executed in accordance with the provisions of the Civil Procedure Law, as amended.

          • Article 66

            Disputes shall cease before the arbitration committee, for the same reasons provided in the Civil Procedure Law, as amended, and shall have the same effect legally resulting from the cessation of the dispute.

          • Article 67

            Where in any hearing by the arbitration committee any question arises which is not within the jurisdiction of the committee, or a claim of forgery of any document is raised, or any criminal proceedings have been taken due to such forgery, the committee shall suspend its work pending the issue of final judgement thereon.

          • Article 68

            Deliberations on the decision shall be confidential, and no person besides the member of the committee who attended the session hearings shall be entitled to participate. Decisions shall be adopted by majority vote. The decision shall be valid if signed by the majority of the members.

          • Article 69

            The decision passed by the arbitration committee shall be in writing, and shall contain in particular, statements and documents of the parties, the reasons for the decision, and date and place of the decision. The decision shall be signed by the arbitrators. However, the decision shall be valid if signed by the majority of the arbitrators.

          • Article 70

            The Control and Investigation Unit shall file the original decision of the arbitration committee and its attachments with the Court Clerks Section, within three days from the date of announcement. The parties shall be notified of such filing.

          • Article 71

            The concerned party may apply to the Chairman of the competent court to obtain a copy of the arbitration committee decision, accompanied by an execution order.

          • Article 72

            The parties may, regardless of the situation of their dispute, apply to the arbitration committee to enter on the record any agreed settlement or other mutual agreement reached by them, to be signed by them or by their representatives. The written agreement shall, in this case, be attached to the committee record and the contents of the agreement shall be entered on the record. And the hearing shall, after the approval of the committee, have the decision issued by the committee.

        • Chapter 8 The Disciplinary Board

          • Article 73

            The Exchange shall have a disciplinary board with powers to decide on any violation to the Law, Internal Regulation and resolutions which regulate the Exchange, and any violation affecting the conduct of business and discipline in the Exchange.

            The disciplinary board shall comprise of three members to be appointed by a resolution issued by the Chairman of the Board. The disciplinary board shall be presided over by the Director of the Exchange and may impose the following penalties:

            1— Reminder.
            2— Warning.
            3— Confiscation of all or part of the broker's guarantee.
            4— Suspension of trading by violating companies for a period not exceeding four months.
            5— Striking off the listed companies and unlisted companies, or the transfer of a listed company into an unlisted company whose securities are admitted for trading.
            6— Suspension of brokers and market makers from work for a period not exceeding four months.
            7— Cancellation of brokers, market makers, and any other person with a similar status membership.

            Deliberations of the disciplinary board shall be confidential. Resolutions shall be adopted by majority vote and the concerned parties shall be notified by registered mail, accompanied by an acknowledgment.

          • Article 74

            The Control and Investigation Unit shall receive applications and complaints which contain the alleged facts involving members, listed companies and unlisted companies whose securities are admitted for trading on the Exchange, and which constitute a violation to the Bahrain Stock Exchange's Law, Internal Regulation and resolutions which regulate the Exchange, and which affect the proper conduct of business therein, or the principles and standards of practicing the brokerage profession.

          • Article 75

            Applications or complaints shall, upon receipt, be recorded in a special register with serial numbers, commencing on the first day of the Gregorian year and ending on the last day thereof.

          • Article 76

            The Control and Investigation Unit shall submit applications and complaints to the Director of the Exchange. These applications and complaints shall either be decided upon by the Director, or returned to the Control and Investigation Unit to begin the investigation process required for making a decision on the alleged facts contained in the application or complaint.

          • Article 77

            The Control and Investigation Unit shall, upon referral of any matter to it by the Director, serve summons on the parties and their witnesses to hear their statements on the matter and write any statements in a record prepared for this purpose.

          • Article 78

            The Control and Investigation Unit shall, upon completion of an investigation, submit to the Director its written opinion on the result of the investigation, and whether the issue constitutes a violation warranting referral to disciplinary proceedings or not.

          • Article 79

            The Director shall refer the violation record to the disciplinary board if an investigation has been carried out, or he shall, where the application has been referred by the Board of Directors for investigation, submit the matter to the Board to decide thereon, or refer the matter to the disciplinary board.

            Violations referred to disciplinary proceedings shall be raised in the form of a statement, which shall contain the name and place of residence of the defendant, date of the violation, and a summarized description of the violation and the available evidence. The disciplinary board shall not consider any violation unless it is submitted in accordance with this method.

          • Article 80

            The record of the violation referred to in the preceding Article shall be submitted to the Chairman of the disciplinary board, for fixing a date for the hearing by issuing an order to that effect. The Control and Investigation Unit shall serve summons on the defendant, requiring him to appear on the date fixed for the hearing.

          • Article 81

            A clerk shall attend the hearing of the disciplinary board and the appellate disciplinary board, in order to keep the record under the supervision of the Chairman thereof. The record shall contain names of members of the board or appellate board, date, time and place of hearing, names of parties who appear, or their representatives, all proceedings carried out in the hearing, and any statements and applications made by the parties. The Chairman and the clerk shall sign the record.

          • Article 82

            The defendant shall appear on the date fixed for hearing the violation, and the board should enable him to state his defense in respect thereof, after notifying him of the violation and of the supporting evidence.

          • Article 83

            If the defendant does not appear at the sitting fixed for hearing the violation, the board shall, if it is proved that the summons was duly served, proceed to hear and decide on the violations in his absence.

          • Article 84

            Records of investigations carried out prior to the disciplinary proceedings shall be attached to the violation record. The disciplinary board, if not satisfied with the investigation, shall carry out its own investigation.

          • Article 85

            The board shall, for the proof of any facts, rely on the evidence obtained from the investigations carried out in respect of the facts which constitute the violation, and shall, at its absolute discretion, prefer one item of evidence to the other. The board shall formulate its valuation according to its own satisfaction. The board must not base its decision on the personal knowledge of its members.

          • Article 86

            The members of the board shall deliberate on the decision before issuing it. Every member shall express his opinion in secret, and the decision shall be taken by majority vote.

          • Article 87

            The decision passed by the disciplinary board must be in writing. It shall contain a review of the violation, statements and defense of the offender, proceedings carried out, reasons for the decision and the decree thereof, and date and place of issue of the decision. The draft decision shall be signed by the Chairman and members of the disciplinary board.

          • Article 88

            The Chairman of the disciplinary board shall pronounce the decision in a public hearing. The draft decision shall be filed in the violation record, after pronouncement thereof.

          • Article 89

            The draft decision shall be filed in the violation record. Copies shall not be delivered to the concerned parties, however any party may, at his request, peruse the draft award.

          • Article 90

            Any concerned party may obtain a copy of the disciplinary decision after the signing thereof by the Chairman of the disciplinary board and the clerk, provided that it shall be delivered to the person personally, or to an attorney duly appointed by a specific power of attorney, and subject to the approval of the Chairman of the disciplinary board and payment of the prescribed fee.

          • Article 91

            The Control and Investigation Unit shall, in the case of the defendant's non-appearance in the hearing, notify him of the decision within five days from the date of issue thereof.

          • Article 92

            Service of all documents, decisions and notices relating to the disciplinary proceedings shall be effected by registered mail.

        • Appendix Internal Regulation

          The Listing Agreement of Shareholding Companies

          Immediately following the listing of its shares:

          1. The company undertakes to adhere to all the Rules and Internal Regulation issued by the Exchange's Board of Directors.
          2. Adherence to all conditions, as stated in Article (39) of the Exchange's Internal Regulation, relating to the listing of shareholding companies.
          3. Submission of all facts, information and statistics, as required by the management of the Exchange.
          4. To inform the Exchange's management of any decisions taken by the company's Board of Directors that may have an impact on its capital, financial structure, profitability and or/profits distribution.
          5. To inform the Exchange's management of any transactions executed on the company's share ownership outside the Exchange, prior to the registration in the shareholders' records, as stipulated in Article (36) of the Exchange's Internal Regulation.
          6. Compliance with the Internal Regulation not to change the company's share ownership in the shareholders' records, unless it has been sanctioned by the management of the Exchange, or it was executed in accordance with the rules laid down by the Board of Directors of the Exchange.
          7. Adherence to settling the registration charges and annual listing fees at a time specified by the management of the Exchange.
          8. To notify the Exchange's management of the Board members' ownership and their share ownership in the company, within one month of their membership nomination and at the end of each financial year.
          9. To notify the management of the Exchange of any relevant information that might have an impact on the soundness and accuracy of trading.
          10. To inform the management of the Exchange of the Board of Directors' decision regarding the distribution of profits, or a profit and loss announcement, in order to obtain the Exchange's approval in advance of the company's announcement.
          11. To notify the Exchange's management of the following:
          I. Description of the sale or purchase of all large assets that might have an impact on the financial situation of the company.
          II. Any information required by the Exchange that has already been specified in the company's law.
          III. Any changes in the structure of the management of the company's Board of Directors and executive management.
          IV. Any information on the company's redeemable securities.
          12. To submit to the Exchange copies of all publications issued for the shareholders at the time of the issuance.
          13. To issue the annual financial reports and accounts within 3 months from the date of the company's financial year-end(1).
          14. To notify the Exchange of any dealings by members of the Board and/or executive management.
          15. To notify each shareholder of the date of the company's annual general meeting.
          16. In the case of issuance of any notification to holders of a category of shares, the same notification shall be disseminated to all categories of shareholders.
          17. To issue the shares certificate within a maximum period of one month.

          (1) Amended by Resolution No. (4) of 1999




          Bahrain Stock Exchange

          Personal
          Photograph
          of the
          Applicant

          REQUEST FOR MEMBERSHIP

          Date: ........................

          TYPE OF REQUEST

          BROKER: ........................... MARKET MAKER: ........................

          Personal Information:

          Applicant's Name: .................................................................................
          Date of birth [day/month/year]: ..................................................................
          Place of birth: .......................................................................................
          Nationality: ..........................................................................................
          Highest qualification: ..............................................................................
          Central Population Registration (CPR) No. :...................................................

          Financial Information:

          Capital: ..................... Bank's Name: ........................ A/C No.: ..................

          Bank Guarantee: .............................. Bank's Name: .................................

          I the undersigned, do hereby certify that the above stated information is true and correct to my knowledge. I also certify that I have never been convicted in an insolvency case, or a felony, or punished by restriction of freedom, either inside or outside Bahrain.



          Signature: .......................................






          For Official Use:

          Number: ..........................................................................................
          Date of receipt: ....................................................................................
          Received by: .......................................................................................
          Date of decision: ....................................................................................
          Approved/rejected: .................................................................................

          Enclosures:

          1. A bank certificate showing the availability of the required capital.
          2. A bank guarantee showing the value of the required guarantee.
          3. A photograph of the applicant.
          4. Specimen signatures of the broker and his authorized assistants.
          5. Photocopies of the applicant's and his assistants' passports.
          6. A cheque in favour of the Bahrain Stock Exchange for the sum of : ................





          Bahrain Stock Exchange

          Personal
          Photograph
          of the
          Applicant

          REQUEST FOR MEMBERSHIP

          Date: ........................

          TYPE OF REQUEST

          Brokerage company: ..............................................................................
          Market Making company: ........................................................................
          Company's name: .................................................................................
          Nationality: .............................................................................................
          Mailing address: ....................................................................................
          Telephone No.: ..................... Fax No.: ..................... Telex: .....................

          Partners' Names:

          Name: ........................ Nationality: ..................... Date of Birth: ...............
          Name: ........................ Nationality: ..................... Date of Birth: ...............
          Name: ........................ Nationality: ..................... Date of Birth: ...............
          Name: ........................ Nationality: ..................... Date of Birth: ...............

          Financial Information:

          Capital: ..................... Bank's Name: ........................ A/C No.: ..................
          Capital: ..................... Bank's Name: ........................ A/C No.: ..................
          Bank Guarantee: .............................. Bank's Name: .................................

          We the undersigned, do hereby certify that the above stated information is true and correct to our knowledge. We also certify that we have never been convicted in any insolvency case, or a felony, or punished by restriction of freedom, either inside or outside Bahrain.



          Signature: ....................................



          Signature: ....................................






          For Official Use:

          Number: ..........................................................................................
          Date of receipt: ....................................................................................
          Received by: .......................................................................................
          Date of decision: ....................................................................................
          Approved/rejected: .................................................................................

          Enclosures:

          1. A bank certificate showing the availability of the required capital.
          2. A bank guarantee showing the value of the required guarantee.
          3. Names and specimen signatures of the authorized individuals who will be signing on behalf of the company.
          4. A photocopy of the applicant's passport.
          5. A photocopy of the company's Memorandum and Articles of Association approved by the concerned officials.
          6. A cheque in favour of the Bahrain Stock Exchange for the sum of : ................








          INFORMATION REQUIRED FOR LISTING ON THE BAHRAIN STOCK EXCHANGE

          LEGAL AND MANAGEMENT INFORMATION:

          1. Company's legal name, the country of incorporation and its headquarters.
          2. Type and class of securities required for listing on the Bahrain Stock Exchange.
          3. Date of the official listing application.
          4. Management:
          i) names and addresses of the board of directors;
          ii) names, titles and addresses of executive officers.
          5. Share capital:
          i) Authorized share capital in terms of value and number of shares.
          ii) Issued and subscribed share capital in terms of value and number of shares.
          iii) Paid-up capital in terms of value and number of shares.
          iv) Number of issued shares.
          v) Nominal par value per share.
          vi) Number of shareholders registered in the company register.
          vii) Name, number and percentage of shares held by major shareholders holding 10% or more of the company's paid-up share capital.
          viii) Number of shares held by each of the company's directors individually, and the number of shares held by the board of directors as a whole.
          ix) Number of shares held by the executive officers as a group and the shareholding of each of them.
          6. Rights and privileges attached to the shares being listed.
          7. Copy of the Commercial Registration certificate.
          8. Particulars of affiliated and associate companies in which the applicant company is holding 10% or more of their paid-up share capital:
          i) Name of the company;
          ii) Nature of the business;
          iii) Authorized share capital;
          iv) Nominal par value per share;
          v) Issued and paid-up share capital and types of issued shares;
          vi) List of benefits received by the board of directors and executive officers, in terms of shares participation, retirement and bonus shares schemes.

          Historical Background:

          A brief account of the history of the company:

          i) A brief background history and company profile regarding the company's principal activities and its products and services.
          ii) The company's main markets and the percentage of each market share, in addition to specifying whether the company is a governmental, or non-governmental organization.
          iii) Main marketing strategy of the company and its methods.

          Financial and Accounting Information:

          1. Long-term loans: Please clarify the following:
          i) Value of long-term loans obtained by the company or its affiliates.
          ii) Types of loans, whether these are commercial loans, debentures, or bonds.
          iii) Maturity date.
          iv) Annual cost of finance.
          2. Revenues: A brief, consolidated statement of the company revenues for the last five financial years.
          i) Gross annual sales turnover.
          ii) Net income.
          iii) Comparative income statements, stating the current financial year's income compared with the previous year, giving an explanation of the difference, if any.
          3. Assets: Please state the fixed assets and properties owned by the company, stating separately any property or land, and their location.
          4. Dividends:
          i) Number of years for which dividends were paid since the date of incorporation.
          ii) Annual dividend per share.
          iii) Annual gross paid-out dividend.
          iv) Timing of dividends payments (annual, half-yearly, others).
          v) Date of announcement of dividends.
          vi) Actual payment date of profit.
          vii) Bonus shares issued during the last five financial years [in detail]:
          a— Total amount;
          b— Total shares issued;
          c— Number of bonus rate, per each share issued.

          Financial, Accounting and Managerial Policies:

          i) Consolidation of accounts:

          Specify the principles adopted in the consolidation of the accounts.
          ii) Depreciation:

          Specify the policy and method of depreciation.

          General Information:

          1. The financial year of the company.
          2. Date of the general meeting.
          3. Required quorum for validity of the meeting.
          4. Names and addresses of the company's share registrar [if available].
          5. Franchise rights, trademarks and brands registered in the name of the company.
          6. Number of permanent staff in terms of nationality and the percentage of each category, compared to the total number of staff.
          7. Disputes before the court:

          Are there any legal disputes in which the company or any of its affiliates are involved in, and which might affect the company's revenues, reputation, properties or assets?

          Other Relevant Information:

          Please attach the following required documentation to the application:

          1. Company's audited financial statements.
          2. Copy of the updated Memorandum and Articles of Association of the company.
          3. Specimen of the shares certificate and transfer documents.
          4. Copy of the resolution of the board of directors approving the listing on the Bahrain Stock Exchange.
          5. Names and specimens of signatures of the company's authorized signatories.
          6. The listing agreement duly signed by the authorized person.
          7. A cheque made out in favour of the Bahrain Stock Exchange for listing charges and the annual maintenance fee (after receiving initial approval from the BSE).

          INTERNAL REGULATION'S APPENDIX (1)

          JOINT STOCK COMPANIES LISTING AGREEMENT

          1. Right after registration of its shares on the Bahrain Stock Exchange, the company shall undertake to abide by all the Internal Regulation and instructions issued by the Exchange's Board of Directors.
          2. Shall comply with all conditions prescribed in Article (39) of the Exchange's Internal Regulation.
          3. Shall submit all the statements, information, and statistical data required by the Exchange's management.
          4. Shall notify the management of the Exchange of all the resolutions passed by the Board of Directors which affect the company's capital, financial structure, profitability and dividend distribution.
          5. Shall notify the Exchange's management of all transactions concerning the ownership of companies shares executed outside the Exchange before its registration on the shareholders registers as provided in Article (36) of the Internal Regulation.
          6. Shall undertake not to change the company's shares ownership in the shareholders registers, unless it is approved by the management of the Exchange, or undertaken in conformity with the rules ordained by the Exchange's Board of Directors.
          7. Shall undertake to settle the registration fee and the annual subscription fee at the times specified by the Exchange's management.
          8. To notify the Exchange's management about the shares ownership of the directors and their ownership in the company's shares within one month from the date of their appointment and at the end of each financial year.
          9. To notify the Exchange's management of any necessary information to maintain the correctness and soundness of the trading.
          10. To notify the Exchange's management of the company's Board of Directors Resolution regarding dividends distribution to the shareholders, or the announcement of the profits and losses, in order to take the Exchange's consent for their publication.
          11. To notify the Exchange's management of the following:
          i. Details of the sale and purchase of some of the large assets, which affect the position of the company.
          ii. Any information specified in the Companies Law to be ordered by the Exchange.
          iii. Any changes in the management structure at the level of the Board of Directors and Executive management.
          iv. Any information about the Companies redeemable securities.
          12. To submit to the management of the Exchange upon its issuance, copies of all publications intended for shareholders.
          13. To issue the annual financial reports and accounts within three months from the date of the company's financial period (1).
          14. To notify the Exchange of all trading undertaken by the company's directors and executives.
          15. To notify every shareholder of the specified date of the company's Annual General Meeting.
          16. Any announcement issued for a certain category of shareholders must be circulated to the other shareholders of all categories of shares.
          17. To issue the shares certificates within a maximum period of one month.

          (1) Amended by Resolution No. 4/1999.

    • BHB Listing and Market Regulations

      1. Board of Director's Resolution No. (6) of 1996, issued at the meeting No. (57) dated 26/6/1996 regarding the general rules for listing local and foreign bonds at the Bahrain Stock Exchange.
      2. Board of Director's Resolution No. (6) of 1996, in respect of listing foreign companies securities at the Bahrain Stock Exchange.
      3. Chairman Board of the Director's Resolution No. (1) of 1993, in respect of the registration of closed Bahraini shareholding companies at the Bahrain Stock Exchange.
      4. Resolution No. (4) of 1992, in respect of defining the requirements of the prospects on the Issuance of securities for shareholding companies.

      • Market Making Guidelines

        Click here to download the Market Making Guidelines in PDF format.

      • Money Laundering Regulations

        Click here to download the Money Laundering Regulations in PDF format.

      • Bahrain Investment Market (BIM) Rules

        Click here to download the Bahrain Investment Market (BIM) Rules in PDF format.

      • REIT Listing Rules

        Click here to download the REIT Listing Rules in PDF format.

      • Market Rules

        Click here to download the Market Rules in PDF format.

      • Resolution No. (6) of 2016 with Respect to Approval of BIM Rules (Arabic)

        Click here to download the Arabic version of Resolution No. 6 of 2016 in PDF format.

      • Resolution No. (5) of 2015  in Respect of Amending the Listing Requirements of Shareholding Companies on Bahrain Bourse Main Board (Arabic)

        Click here to download the Arabic version of Resolution No. 2 of 2015 in PDF format.

      • Resolution No. (2) of 2015 with Respect to Approval of REIT Listing Rules (Arabic)

        Click here to download the Arabic version of Resolution No. 2 of 2015 in PDF format.

      • Resolution No. 8 of 2011 in Respect of Listing Requirements (Arabic)

        Click here to download the Arabic version of Resolution No. 8 of 2011 in PDF format.

      • Board Meeting No. 57/96 Resolution No. 6/96 — Listing Local and Foreign Bonds

        General Rules for Listing Local and Foreign Bonds:

        1. The Local bonds should have been issued in accordance with the Commercial Companies Law for the year 1975.
        2. Foreign bonds should have been issued in accordance with the relevant laws of the issuing country.
        3. The company should obtain the Bahrain Monetary Agency's approval.
        4. Two years should have elapsed from the date of the issuing company's incorporation.
        5. The company's financial position should be sound.
        6. The company's paid-up capital should not be less than US$10,000,000.
        7. The company should abide by the listing agreement to be signed with the Exchange.
        8. The company should appoint a representative office in Bahrain for the registration of its bonds, distribution of dividends, reports and other related matters.
        9. The company should publish its balance sheets and financial results in various media instruments.

      • Board Meeting No: 57/96 Resolution No. 6/96 — Listing Foreign Companies

        General Rules for Listing Foreign Companies at the Bahrain Stock Exchange:

        1. The company should be a joint stock company, listed in its country of incorporation or a closed company, established at least three years before the date of listing.
        2. The company's paid-up capital should not be less than US $ 10,000,000.
        3. The company should have realized a net profit on its major activities for the three years proceeding the date of application.
        4. The company and its country of incorporation should have no restrictions on the free transfer of securities ownership between the investors.
        5. The financial position of the company should be sound.
        6. The number of the company's registered shareholders shall not be less than 100.
        7. The company should issue a semi-annual accounts reviewed by its auditor and an annual audited balance sheet.
        8. The company should appoint a representative office in Bahrain, to undertake the registration of shares, distribution of dividends, reports and other related matters.
        9. The company should adhere to the Exchange's Listing Agreement.

  • Resolution No. (1) 1993 in Respect of the Registration of Closed Bahraini Jointstock Companies on the Bahrain Stock Exchange

    The Chairman of the Exchange's Board of Directors:

    After perusal of Decree Law No. (28) of 1975, in respect of issuance of the Commercial Companies Law and its amendments,
    And Decree Law No. (4) of 1987, pertaining to the establishment and organization of the Bahrain Stock Exchange,
    And the Minister of Commerce and Agriculture's Resolution No. (13) of 1988, concerning the issuance of the Exchange's Internal Regulation,
    And upon the submission of the Director of the Bahrain Stock Exchange,
    And pursuant to the approval of the Exchange's Board of Directors,

    RESOLVED AS FOLLOWS:

    • Article One

      The Bahrain Stock Exchange may register the Bahraini closed joint stock companies, subject to the following conditions:

      1. The company should have complied with all provisions relating to the closed joint stock companies, as prescribed in Decree Law No. (28) of 1975, in respect of the Commercial Companies Law and its amendments.
      2. That the paid-up capital shall not be less than BD200,000, or its equivalent in other currencies. Shares in excess of BD200,000 shares shall be at least 50% paid up.
      3. The price of the shares issued by the company shall not be less than the paid percentage of the nominal value of the shares.
      4. The company should issue the annual financial reports and final accounts within six months from the end of the company's financial year.
      5. If the company undertake activities outside the State of Bahrain, it should appoint a registrar and transfer in Bahrain.
      6. The company's financial position should be sound in terms of its assets, liquidity, stability of its financial structure and efficiency of performance.
      7. The company should have achieved profits during the last two years preceding the submission of the application, or for three years during the last five years.
      8. The company should undertake to comply with the terms of the closed Joint stock companies Registration Agreement (enclosed).
      9. Any other conditions that may be issued from time-to-time by the Exchange's Board of Directors.
      10. The Exchange's Board of Directors may exclude some of the previous conditions, provided that the company should complete its registration procedures and conditions.

    • Article Two

      The applications for the registration of the Bahraini closed joint stock companies should include the following:

      1. Formal application for the registration of the company on the Bahrain Stock Exchange, to be issued by the chairman or the managing director of the company, along with the approval of the company's board of directors at an extraordinary general meeting.
      2. Information and financial statements of the applicant company's for the preceding five years.
      3. A list of the information and statements required by the Exchange.

      The management of the Exchange shall respond to the application within a maximum period of 45 days from the date of application.

    • Article Three

      The Bahrain Stock Exchange shall publish the shares offered for sale, the selling time for the remaining shareholders and the others and the required price. The Director of the Exchange shall issue special resolution to define such timing.

    • Article Four

      The regulations and resolutions of the Bahrain Stock Exchange shall be applied to Bahraini closed joint stock companies, and the Director of the Exchange shall issue the instructions relating to the execution of the resolution of the Exchange's Board of Directors in respect of regulating the trading of such companies shares and prescribe for the basics and procedures for setting the commission.

    • Article Five

      The closed joint stock companies should undertake to provide all information and particulars required by the Exchange. Such information and particulars shall be factual and conformant with company's position, subject to the companies responsibility, and in accordance with the Exchange's appropriate resolution. The Exchange shall not bear any kind of responsibility for accepting the trading of the company shares. The Exchange shall have the right to verify the correctness of any information and particulars submitted by these companies.

    • Article Six

      The Director of the Bahrain Stock Exchange shall implement this Resolution, which shall come into effect from the date of its publication in the Official Gazette.

      The Minister of Commerce & Agriculture
      and Chairman of the Board of Directors
      of the Bahrain Stock Exchange

      Issued on 7th Shawal 1413 H
      Corresponding to 29 March 1993

  • Resolution No. (4) of 1992 in Respect of the Joint Stock Companies' Securities Prospectus Requirements

    The Chairman of the Exchange's Board of Directors:

    After perusal of Decree Law No. (28) of 1975, in respect of the Commercial Companies Law and its Amendments;
    And Decree Law No. (4) of 1987, pertaining to the establishment and organization of the Bahrain Stock Exchange;
    And the Minister of Commerce & Agriculture's Resolution No. (13) of 1988, concerning the issuance of the Bahrain Stock Exchange's Internal Regulation, amended by Resolution No. (2) of 1990;
    And upon the submission of the Director of the Bahrain Stock Exchange;
    And after the consent of the Exchange's Board of Directors;

    RESOLVED AS FOLLOWS:

    • Article One

      Founders of joint stock companies, before offering their securities for public offering for the establishment of a new company, or raising the capital of an existing company, or changing its legal entity and offering its securities to the public after obtaining the Ministry of Commerce & Agriculture's approval, must submit an application along with two preliminary draft copies of the prospectus to the Bahrain Stock Exchange for approval.

    • Article Two

      The preliminary draft of the prospectus/offering submitted to the Bahrain Stock Exchange for approval, shall contain the following documents, particulars and information:

      1. A copy of the company's preliminary Memorandum and Articles of Association.
      2. A copy of the approval for the public offering.
      3. A copy of the General Assembly's extraordinary meeting Resolution approving the company's increase of capital.
      4. A copy of the Resolution regarding the capital contribution in-kind, if available.
      5. A list of shareholders who own 5% or more of the company's capital.
      6. A declaration of any investment privileges or concessions that the company enjoys under any law, if available.
      7. A copy of the existing company's auditor's report, pertaining to the financial matters referred to in the prospectus.
      8. A sample of the shares certificates.
      9. Any other documentation or particulars that may be required by the Bahrain Stock Exchange.

    • Article Three

      The Bahrain Stock Exchange shall review the prospectus, approve it and stamp it for publication. Thereafter, the Exchange shall retain one copy of the prospectus and deliver the other copy to the applicant company.

    • Article Four

      The joint stock company must publish the prospectus in a printed form, if the securities issue value exceeds BD 200,000.

    • Article Five

      The joint stock company must provide every subscriber with a copy of the prospectus during the public offering.

    • Article Six

      The joint stock company must submit to the Bahrain Stock Exchange the draft text of the prospectus intended for publication in the press for the Exchange's approval. This text must include all the particulars required in accordance with the Commercial Companies Law and its amendments and the Bahrain Stock Exchange's regulations. This preliminary text shall be submitted to the Exchange one week before its publication.

    • Article Seven

      The two standard forms of the prospectus attached to this Resolution shall be used.

    • Article Eight

      The Director of the Bahrain Stock Exchange shall implement this Resolution, which shall come into effect from the date of its publication in the Official Gazette.

      Minister of Commerce and Agriculture
      and Chairman of the Board of Directors
      of the Bahrain Stock Exchange

      Issued on 9 Rajab 1412 H
      Corresponding to 13 January 1992

  • BHB Trading Rules and Procedures

    1. Resolution No. (6) of 2001, in respect of provision of remote trading at the Bahrain Stock Exchange.
    2. Resolution No (4) of 1999, on the rules and procedures of automated trading at the Bahrain Stock Exchange.
    3. Resolution No. (2) of 1990, in respect of certain conditions relating securities trading.

    • Guidelines on Issuer's Key Persons Dealing in Securities Accepted for Trading on BHB

      Click here to download the 'Guidelines on Issuer's Key Persons Dealing in Securities Accepted for Trading on BHB' in PDF format.

    • Guidelines on Trading of Treasury Bills (T-Bills) on BHB

      Click here to download the 'Guidelines on Trading of Treasury Bills (T-Bills) on BHB' in PDF format.

    • BHB Debt Securities Guideline

      Click here to download the 'BHB Debt Securities Guideline' in PDF format.

    • REITs & Fund Instruments Guideline

      Click here to download the 'REITs & Fund Instruments Guideline' in PDF format.

    • Resolution No. (6) of 2001 in Respect of Provision of Remote Trading at Bahrain Stock Exchange

      The Chairman of the Exchange's Board of Directors:

      After perusal of Decree Law No. (28) of 1975 in respect of issuing the Commercial Companies Law and its amendments,
      And the Decree Law No. (4) of 1987, pertaining to the establishment and organization of the Bahrain Stock Exchange,
      And the Minister of Commerce and Agriculture Resolution No. (13) of 1988 concering the issuance of the Exchange's Internal Regulation,
      And upon the proposal of the Board of Directors of the Bahrain Stock Exchange,
      And upon the submission of the Director of the Exchange.

      RESOLVED AS FOLLOWS:

      • Article One

        Brokerage Companies licensed by the Minister of Commerce and Agriculture, Chairman of the Exchange Board of Directors Resolution No. (2) of 1995, are permitted to undertake Remote Trading in listed securities and instruments at the Exchange in accordance with the rules and conditions stipulated by the Exchange from time to time.

      • Article Two

        The Remote Trading service shall be provided in accordance with the programmes, equipment's, instruments and technical specifications specified by the Exchange. Brokerage Companies shall abide by the Decree Law No. (4) of 1987 in respect of the establishment and organization of The Bahrain Stock Exchange, the Internal Regulation and the related resolutions, specifically, the Exchange rules and procedures of trading, settlement, clearing and central depository.

      • Article Three

        The Exchange shall charge the brokerage companies Licensed to provide Remote Trading services a monthly Licensing fee of BD150.000 (One hundred and fifty Bahraini Dinar). The Exchange may review this monthly fee at its discretion.

      • Article Four

        This resolution shall be implemented temporarily, and shall be made find upon the success of the experience. The Director of the Exchange shall set the necessary rules and procedures for its implementation.

      • Article Five

        This Resolution shall be circulated to the heads of sections and units of the Exchange, and each in his respective capacity, shall implement its provisions. This Resolution shall come into force from the date of its issuance.

        Ali Saleh Al Saleh
        The Minister of Commerce and Industry and
        Chairman of the Exchange's Board of Directors

        Issued on 4th Ramadhan 1422h
        Corresponding to 19 December 2001

    • Resolution No. (4) of 1999 on the Rules and Procedures of Automated Trading on the Bahrain Stock Exchange in the Test Period

      The Chairman of the Exchange's Board of Directors:

      After perusal of Decree Law No. (4) of 1987, pertaining to the establishment and organization of the Bahrain Stock Exchange;

      And upon the Minister of Commerce Resolution No. (13) of 1988 concerning the issuance of the Exchange's Internal Regulations;

      And upon the proposal of the Board of Directors of the Bahrain Stock Exchange;

      RESOLVED AS FOLLOWS

      • Article (1)

        The attached trading rules and procedures shall be applied during the test period of operations for the automated trading at the Bahrain Stock Exchange. During this period, the Exchange's Management shall work on improving these rules and procedures.

      • Article (2)

        Notwithstanding the provisions of the above stated Article, the Director of the Exchange has the right to the necessary resolutions and procedures, in order to implement the provisions of this Resolution. The Director shall from time-to-time, convey any resolution or decision taken by him to the Chairman of the Board of Directors. The Chairman has the right to repeal, cancel or endorse any Resolution in this regard.

      • Article (3)

        The provisions and resolutions which are inconsistent with the provisions of this Resolution shall be repealed.

      • Article (4)

        The Director of the Exchange shall implement this Resolution from the date of its signature.

        Minister of Commerce

        Issued on 30 Sha'aban 1420 H
        Corresponding to Wednesday, 8th December 1999

      • Sec. 1 Definitions

        • Article (1)

          In this Resolution, the following words shall have the meaning assigned to each one unless the context states otherwise:

          BATS: means the Bahrain Stock Exchange's Automated Trading System.
          Bid: means an order by a stockbroker to buy securities at a certain price, or a price that a buyer is willing to accept for his securities.
          Board Lot: means a standard number of shares or stock, as determined by the Exchange, which can be traded on the market.
          Board Trading Session: means a stage during the trading session when any simultaneous arrangements and special trades are dealt in. This usually takes place during the Pre-Opening session of BATS.
          Chairman: means the Chairman of the Exchange.
          Client Contract Notes: are a record of the details of the match, its total value and all charges.
          Client Order: means an order placed for the account of a client, or the client is the beneficial owner of the securities traded.
          Director: means the Director of the Exchange.
          Exchange: means the Bahrain Stock Exchange.
          Exchange Account Number: means an account number generated by the Exchange, to serve as the point of reference for administrative purposes.
          Deal, Match, Trade: are three terms used interchangeably to refer to bids and offers which have been either wholly or partially satisfied.
          Foreign Investor Order: means an order placed for a non-Bahraini investor's account, whether an individual or institution.
          Insider Order: means an order made for the account of the officers and directors of listed companies to buy or sell shares of such companies, and orders made for the account of a person who owns more than 10% of the stock of these companies.
          Issuer Order: means an order made by the issuing company when it desires to repurchase its shares on the open market.
          Market Imbalance: means a situation in the Pre-Opening market when the best bid is higher than the best offer.
          Market Controller: means an Exchange official who manages the trading operations of the Exchange, in accordance with this Resolution.
          Market Control Order: means an order made by the Market Controller to buy or sell shares in buy-in or sell-out situations.
          Market Maker: means an authorized trader employed by an investment dealer who is required to maintain reasonable liquidity in the securities market, by making firm bids and offers for one or more designated securities.
          Mutual Fund Order: means an order made for the accounts of investment companies.
          Offer: means an order by a stockbroker to sell securities at a certain price, or a price which the seller will accept for his securities.
          Opened: means a state during the trading session where all securities are fully opened and continuous trading activity can occur.
          Opening Algorithm: means a calculation used on opening the Exchange to calculate an opening price for each security.
          Order Log Book: means a register maintained at the offices of each stockbroking firm, containing details on each buying and selling order received by the firm.
          Order: means an instruction from a client to a stockbroker to buy or sell securities.
          Pre-Opening: means a state during the trading session where stockbrokers can enter orders and view inquiries.
          Price: means the unit price of a security.
          Professional Order: means an order made for the accounts of partners, directors, officers, investment advisors of brokerage firms, listed companies, employees of the Exchange and brokerage firms.
          Queue Priority: means all orders in the system are sorted according to priority of orders for execution, in accordance with the Queue Priority rules as outlined in these Rules and Procedures.
          Regular Order Book: means a book that contains all unfilled orders without any special terms. Regular orders are given priority in trading over all other orders.
          Symbol: means a set of characters that identifies the security being traded.
          Tick Size: means the step-by-step increase or decrease in price by which bids and offers may be raised or lowered.
          Trade Range: means the percentage increase/decrease from the trade weighted average price dealt in during the last trading session, in which that particular security was traded.
          Trading Board: means the facility provided by the Exchange for manual matching during the Board Trading Session.
          Trading Floor: means the room, area and other facilities designated or made available by the Exchange for effecting trades and other transactions between members during the trading sessions of the Exchange.
          Trading Session: means the period during which orders can be entered, amended, or cancelled and trading takes place. A typical trading session contains a Pre-Opening and an Opened session.

      • Sec. 2 General Conditions

        • Article (2)

          • Trading Sessions

            1- Trading Sessions shall be held on such days as the Exchange shall determine by written notice. BATS is accessible from 10:00 am to 12:00 noon on each business day (five days a week from Sunday to Thursday) including a Pre-Opening period of 10 minutes, starting from 9:50 a.m.
            2- Market opening and closing times are established by the Exchange. No transactions may be effected before the opening bell or after the closing bell.

        • Article (3)

          • Trading Restricted to Trading Sessions

            Subject to the exceptions set out in Article (2) of the Bahrain Stock Exchange's Law No. (4) for the year 1986, all purchases and sales of listed securities must take place at the Exchange during a trading session. Unless otherwise prescribed by the Exchange, all securities shall be traded using BATS, subject to this Resolution.

        • Article (4)

          • Access to the Trading Floor

            Access to the Trading Floor is limited to:

            (i) Members of the Exchange and their accredited representatives;
            (ii) Exchange personnel; and
            (iii) Any other person duly authorized by the Exchange.

        • Article (5)

          • Financial Market

            Financial market orders shall be traded on the following markets:

            1- Regular Market: this market consists of a hybrid and does not allow unique trades such as odd lot or negotiated trades deal.
            2- Whole or Non Market:
            (i) The value of the order shall not be less than BD50,000;
            (ii) It shall be in favour of one person only;
            (iii) A whole or non deal shall not be connected with any deal in the regular market, except for the determination of the tick sizes and trade range;
            (iv) The broker can improve his prices and execute the deal with himself, after notifying the Market Controller, if no other broker offers a bid.
            3- Mutual Funds market.
            4- Bond Market.
            5- Odd-Lot Auction Market: All odd-lot share certificates shall be traded in the odd-lot auction market, subject to the following rules:
            a) All sell and buy orders are whole or non because the odd-lot certificate cannot be broken up.
            b) Special settlement terms and market orders are not allowed in this market.
            c) Brokers may combine odd-lots, whether related or not.
            d) Sell and buy orders shall be traded on the regular market, if the combined odd-lots exceed one board lot.
            e) Sell and buy orders shall be traded on the odd-lot auction market, if the combined odd-lots do not exceed one board lot.

        • Article (6)

          • Instructions From Clients

            1- It is the responsibility of members of the Exchange to ensure that they receive bona fide instructions from clients, and that they have effective procedures for identifying the persons from whom they take instructions to effect transactions.
            2- Instructions may be received from clients:
            a) directly on completion of the appropriate instruction form; or
            b) by completing the appropriate instruction form, but utilizing financial intermediaries; or
            c) through their appointed attorney, and in accordance with the terms set out in the power of attorney; or
            d) in accordance with a client's agreement letter.
            e) In the case of (b) and (c) the Exchange has to be informed of the person authorized to act on behalf of the client.
            3- At no stage shall a stockbroker make an offer or bid for shares, unless he has a genuine request by a client, in accordance with the Exchange's Internal Regulations. The Market Controller can ask any stockbroker to prove that a genuine request exists and the stockbroker is required to comply accordingly. This rule does not apply in the case where a stockbroker, acting on behalf of his firm, takes a position as principal by acquiring holdings of securities, including equities, for long-term investment purposes on behalf of his firm.

        • Article (7)

          • Order Log Book

            All buying and selling orders shall be listed in an "Order Log Book" which must contain the following information:

            1- a sequential order number;
            2- the date and time of receipt of the order;
            3- the type of order (i.e. bid or offer);
            4- the name or symbol of the listed security;
            5- the number of shares or stock to be traded;
            6- the trading price and any conditions;
            7- the expiry condition of the order, if any;
            8- the client's/clients' name/s;
            9- the Exchange Account Number; and
            10- the financial intermediary code, if applicable.

        • Article (8)

          • Ownership of Securities

            Following the close of the trading session, the Exchange shall pass the necessary entries in the "Registers of Holders" of the relevant securities, to reflect the transactions effected during the trading session. The ownership of a security, together with all its rights and interests in respect of which the transaction was effected passes from the seller(s) to the buyers(s), with effect from the moment of entry into the Registers of Holders.

        • Article (9)

          • Functions of the Stockbroker

            1- The selling stockbroker will use his best endeavours to sell the listed securities on the first trading day, following the receipt of instructions from his client.
            2- The selling stockbroker shall be responsible for ensuring that his client is the registered holder of the security. He must ascertain that there is enough available holdings to be sold, and that there is no charge registered against these holdings in the "Central Securities Depository", or the "Register of Shares". If it transpires that the holdings are not sufficient to meet the order, or that there is a charge against the holdings, the order will be rejected by BATS.
            3- The buying stockbroker shall use his best endeavours to buy the listed securities on the first trading day following the receipt of instructions from his clients.
            4- Both the selling and buying stockbrokers shall be responsible for supplying the Exchange with sufficient details of their clients, to enable the Exchange to produce the "Client Contract Notes" on behalf of the stock broking firms. This information must be supplied before the trade execution. In the event that sufficient details of the client are not available at the Exchange, the order will not be validated by BATS.

        • Article (10)

          • Disputes and Irregular Deals

            1- The settlement of disputes arising on the Trading Floor concerning the terms of transactions shall be decided by the Market Controller and his decision is final.
            2- Any deal which in the opinion of the Director is irregular, or is in contravention of the Exchange Law, Internal Regulations, or these Rules and Procedures, shall be reported immediately to the Chairman.
            3- Any deal determined by BATS is binding with both parties, unless an appeal is lodged with the Director. If after an investigation an error is detected, the Director may take such action as he deems fit, including the cancellation of the trade.

        • Article (11)

          • Trading Delays and Interruptions

            The Director has the authority to take such decisions as may be required to delay the opening or to interrupt trading in any security, in order to assist in the orderly opening or trading of such security.

        • Article (12)

          • Systems Failure

            Failure in any of the systems installed at the Exchange for trading purposes shall be immediately reported to the Market Controller, who shall take the necessary action to suspend or close trading or to operate under a manual trading system, as directed by the Director. Every effort shall be made in order to resume the orderly conduct of trading as soon as possible. Under no circumstances shall the Exchange be responsible for damages which arise from any such failure, error or defect in the equipment, either directly or indirectly.

      • Sec. 3 Trading Procedures

        • Article (13)

          • Validity of Bids and Offers

            1- To be valid, bids and offers must be made:
            b) during the trading session;
            c) to all members generally and without discrimination; and
            d) in the manner prescribed by this Resolution.
            2- To be valid, an order must specify:
            a) the name or symbol of the listed security;
            b) whether the order is to buy or sell;
            c) the number of shares or stock to be traded;
            d) explicit instructions regarding the trading price;
            e) any conditions which must be met prior to the order becoming effective, if any;
            f) the Exchange Account Number of the underlying client on whose behalf the order is being effected, if applicable; and
            g) the financial intermediary code, if applicable.

        • Article (14)

          • Board Lots and Tick Sizes

            Orders must be entered within the defined board lots and tick sizes, as specified by the Exchange. All trades shall be executed within the trade ranges as set by the Exchange. The Exchange shall have the right to adjust the board lots and the tick sizes in light of market conditions. Any trades effected at prices which are outside the stipulated trade range will be cancelled.

            The Exchange adopts, in the meantime, the following board lots and tick sizes for orders in Bahraini Dinars and U.S. Dollars:

            1- Board Lots:
            a) Orders in Bahraini Dinars.

            Regular Market Odd Lots WON
            Market
              Market
            Board Lots
            Class Price (BD)   Board Lot Maximum Minimum
            No From
            BD50,000
            To Shares Shares
            1 0.001 0.050 10,000 9,999  
            2 0.051 0.100 5,000 4,999  
            3 0.101 0.250 2,000 1,999  
            4 0.251 0.500 1,000 999  
            5 0.501 Above 500 499  
            b) Orders in U. S. Dollars.

            Regular Market Odd Lots WON
            Market
              Market
            Board Lots
            Class Price (US $)   Board Lot Maximum Minimum
            No
            BD50,000
            From To Shares Shares (Eqv.)
            1 0.01 2.00 1,000 999  
            2 2.01 4.00 400 399  
            3 4.01 10.00 200 199  
            4 10.01 Above 100 99  
            2- Tick Prices:
            i) Orders made in Bahraini Dinars.

            Class No Price Range (BD) Tick Size
              From To (Fils)
            1 0.001 0.200 1
            2 0.201 0.500 2
            3 0.501 1.000 5
            4 1.001 2.500 10
            5 2.501 Above 20
            b) Orders made in US Dollars.

            Class No Price Range (US $) Tick Size
              From To (¢)
            1 0.01 2.00 1
            2 2.01 4.00 2
            3 4.01 10.00 4
            4 10.01 Above 5

        • Article (15)

          • Price Fluctuation:

            The Exchange protects the prices by limiting the price variation (up and down) to a maximum of 10% of the previous closing price.

        • Article (16)

          • Source of Orders:

            The following orders shall be accepted for trading on the Exchange:

            1. Client Order
            2. Foreign Investor Order
            3. Market Control Order
            4. Mutual Fund Order
            5. Issuer Order
            6. Professional Order
            7. Insider Order

        • Article (17)

          • Definition of Orders

            The following are the permissible orders:

            1- Limit Order: An order that has a specified price when it is posted for execution.
            2- Market Order: An order that does not have a specified price when it is posted for execution. A Market order must be executed promptly at the best price obtainable, and will have priority over Limit Orders at the same price levels entered in the Pre-Opening period, and assumes an initial price limit value normally based on the most advantageous price on the market. A Market Order trades through a range of prices, starting with the best price on the market. The range of prices that a Market Order can go to may be limited by the Exchange.
            Market Orders require a current market price, and therefore are not accepted until the market is loaded.
            3- Day Order: The order is valid until the close of the trading day on which it was entered.

        • Article (18)

          • Time in Force Restrictions (TIF)

            Orders are allowed to have time restrictions, which limit the period the order is available to trade. The order will be automatically removed after close of trading for the stipulated day.

        • Article (19)

          • Orders Exceeding BD999,999/-

            Prior approval of the Director is required before execution, if the value of the order exceeds BD999,999/-

        • Article (20)

          • Disclosed and Undisclosed Volumes

            1- An order may specify the total share volume and may also specify a lesser amount than is disclosed to the market. However, the disclosed share volume should not exceed the undisclosed volume by 50% of the total share volume.
            2- Undisclosed volume amounts are private; they are only seen by the stockbroker entering the order and the Market Controller. Everyone else will only see an indication that an undisclosed volume is present. When fills have reduced an order to the point where there is no remaining undisclosed volume, the indicator will no longer appear.
            3- If an order can be filled on initial entry, it will be filled to the extent of the total volume of the order. A partial fill will result in the remaining order volume being posted with the full original disclosed volume, provided sufficient volume remains.
            4- The disclosed quantity acts as the roll-in quantity upon the original order entry. Roll-in quantity cannot be changed, except by changing the disclosed quantity. A change in the disclosed volume will not change the total or remaining volume.
            5- An increase in the disclosed volume will lead to a new time stamp and change in queue priority. A decrease in the disclosed volume will not lead to a new time stamp.
            6- Partial fill diminishes current volume without replenishment from undisclosed volume, unless there are no further orders behind at the current price level. Where no orders exist behind the traded order, the disclosed quantity will be automatically rounded-up to the full disclosed amount. When there are orders queued after the disclosed volume, the total disclosed volume must be traded before a new roll-in quantity is brought in. Once the total disclosed volume is traded, another amount equal to the disclosed volume will be rolled-in with a new effective time stamp.
            7- Only the disclosed volume and an indicator showing that there is an undisclosed amount is public.

        • Article (21)

          • Alteration of Orders (Change Former Order-CFO)

            A stockbroker may change the terms of an order already entered in BATS for the following reasons:

            1- If the security, symbol, market or the order type (buy or sell) needs to be changed, the order must be cancelled and re-entered.
            2- If any of the following changes are effected, a new effective time stamp will be given to the order:
            (a) change in price;
            (b) increase in disclosed volume;
            (c) a change in the underlying client.
            3- If any of the following changes are effected, the order will keep its original effective time stamp:
            (a) decrease in disclosed volume.
            (b) changes in undisclosed volume.

        • Article (22)

          • Cancellation of Orders

            An order can be cancelled as long as it has not been matched. During trading, stockbrokers can remove groups of orders or all of their orders from the trading system. Once a cancel order has been issued, the original order cannot be retrieved.

        • Article (23)

          • Priority of Orders for Execution (Queue Priority)

            Orders that cannot be immediately executed are queued for future execution in a specific order, based on a queue priority. The factors used to determine the queue priority in order of consideration are:

            1- The Price:
            The price of an order determines its primary priority for execution. An order can be specified with a limit price or a market price. For both buy and sell, the higher priority price is defined as the better price, i.e. a buy order at a higher price will take priority over other buy orders at a lower price, and a sell order at a lower price will take priority over other sell orders at a higher price.

            A market order being queued at a limit price will be treated the same as if it had been entered as a Limit Order at that price.
            2- Source of Order Priorities:
            Sources of orders shall have the following priorities:
            a- First priority:
            (a) client order
            (b) foreign investor order
            (c) market control order
            b- Second priority:
            (a) mutual fund order
            (b) issuer order
            (c) professional
            c- Third Priority:
            (a) insider order
            3- Time of Entry:
            (i) The time of entry of an order governs its priority on a First-In First-Out (FIFO) basis. Orders entered into BATS are given a time stamp, noting their actual date and time of entry. At a ingle limit price, the earliest time of entry takes priority in the queue.
            (ii) If any portion of an order remains unfilled after the opening, its time priority will be based on the actual time of entry during Pre-Opening.
            (iii) An order that participates in a fill that does not entirely deplete the current disclosed volume (i.e. is partially traded), will retain its effective time of entry and its position in the queue.
            (iv) Changing the terms of an order may result in a new effective time stamp, and may change the relative priority position of the order in the queue. Whether or not a new time stamp is assigned depends on the nature of the change to the order. See the Alteration of Orders — Change Former Order (CFO) section.
            4- Cross priority:
            Is applied starting with the order of the highest queue priority on the side designated as aggressive. This order is traded first against orders from the other house, then against the same house order.
            5- Random Factor:
            In the event that two orders are received at exactly the same time, priority will be given using a random factor.

        • Article (24)

          • Bahrain Stock Exchange's Automated Trading System

            The BATS shall consist of a Pre-Opening stage, At the Open, and Opened stage for continuous trading.

        • Article (25)

          • Pre-Opening

            1- Prior to the start of regular trading, there shall be a Pre-Opening period, during which orders can be entered to determine the opening price for each security. These orders will be queued in accordance with the Priority of Orders for Execution (Queue Priority) and shall not be processed immediately.
            2- During this period, stockbrokers can enter orders, change former orders (CFO), cancel orders and carry out inquiries on orders already in the system.
            3- As each order is queued, the system will verify whether the security is expected to open and calculates the opening price in accordance with the Opening Algorithm.
            4- A market imbalance can be created during the Pre-Opening period, whereby the best bid is higher than the best offer. In this instance, an opening price will be chosen based on the following criteria in priority order:
            a) maximum volume of shares to be traded;
            b) minimum imbalance in share volume;
            c) least net change from last day's closing price;
            d) highest share price.
            5- In the Pre-Opening period, the actual price entered for a limit order that is better than the current predicted opening price is considered private information to the stockbroker entering the order and to the Exchange. The stockbroker entering the order would see the actual price entered and be able to clearly see that the order is causing an "imbalance". The Market Controller would also see the actual price. For all other stockbrokers, the order would be treated as if it had been entered at the currently predicted opening price. However, as the opening price changes, the volume at the previously predicted opening price and the currently predicted opening price will change.

        • Article (26)

          • At the Open & Opened Operations

            1- During 'At the Open', an opening price is chosen in accordance with the 'Opening Algorithm'. The calculated opening price is intended to create the largest volume of trade.
            2- Once the opening price is chosen, all the orders that can execute at this price will take place.
            3- 'At the Open', the aggressive side is designated as the "balanced side"; i.e. the side that will be completely traded in the open.
            4- When the bid volume and the offer volume are the same, both sides will be completely traded. In this case, the side with the earliest order will be chosen as the aggressive side.
            5- The allocation of orders during 'At the Open' is based on the following :
            a) Allocation at better than opening price — Once the opening price is selected, all market orders will be fully traded, followed by limited orders at better than opening price, taking into consideration the source of order, priority and the cross priority.
            b) Shared allocation at the opening price — Once all market orders and limit orders i.e., at better than opening price are fully traded, the remaining volume will be allocated on the board lots between the numbers of the remaining orders on the opposite side. The allocation is made in the order of the FIFO method.
            c)
            (iii) Orders not completely filled — All orders entered during the Pre-Opening have a time priority based on the actual time of entry. For orders not completely filled during 'At the Open', this time priority is maintained thereafter during the trading day.
            d) Trading done during 'At the Open' on the basis of cross priority has no effect at all on the calculation of the trades for the shared allocation of any remaining volume. Shared allocation of remaining volume is done strictly on the basis of the number of orders on the opposite side of the market from the remaining volume on the designated aggressive side.
            6- At the completion of the Opening Algorithm, the market will be open for normal continuous trading. Each new order, revision (CFO), or cancellation will be processed by the system on arrival. If an order cannot be executed immediately, it will be queued in accordance with the Priority of Orders for Execution-Queue Priority mentioned earlier.

        • Article (27)

          • Close of Trading

            New orders and revisions to existing orders can be input until the closing signal.

        • Article (28)

          • Market Controller

            The Market Controller assumes the following functions:

            (a) Provides advice to members on the interpretation and implementation of trading rules.
            (b) Configures the Exchange parameters and enforces controls.
            (c) Manages the daily trading schedule.
            (d) Monitors price movements and reviews market activity.
            (e) Reviews market imbalances 'At the Open', (BATS automatically updates all imbalances).
            (f) Provides information to investigative and regulatory agencies as required.
            (g) Executes orders on behalf of the Exchange (corrects errors i.e. cancelled trades).
            (h) Controls trading activity (i.e. half suspends, reinstates a symbol for trading).
            (i) Has access to current and historical market information, including private broker information, such as undisclosed volumes, client account reference, IDS, etc.
            (j) Enters and completes trades that take place outside the regular operating hours on behalf of members of the Exchange (i.e. to enter late trade).
            (k) Changes the attributes of any of the trades that have already occurred, including the time stamp (trade correction).
            (l) Corrects any errors made by traders when they enter a trade. A trade allows them to rectify their mistake. The Market Controller, when reinstating the buy or sell orders or both when cancelling a trade, can reinstate the orders to the original time stamp.
            (m) Sends bulletins to broadcast information to traders, other stock markets and various data feeds (i.e. Reuters).
            (n) Determines the state of a symbol independently from the rest of the securities listed on the Exchange (e.g., if symbol XYZ is halted by the Market Controller, the remaining symbols in that market are nor effected).
            (o) Halts, suspends, or delays trading of a symbol in one or more of the markets that the symbol trades in (e.g., symbol XYZ can be halted in the odd lot market, but allowed to trade in the negotiated deals market if the Market Controller allows only half Odd Lot Trading).
            (p) Uses the market state function in exceptional circumstances to manually control the state of a specific market during the trading day (e.g. the Market Controller can halt the trading in the Odd Lot Market).
            (q) Sets the current state of the entire Exchange. This can be set Pre-Opening suspended or closed.
            (r) Suspends/resumes any trader groups of traders or houses.
            (s) Sets the state of tightly coupling with the CDS to ON/OFF.
            (t) Cancels the orders in a frozen trade or allows the trade to continue.
            (u) When the freeze parameters are changed in the database, the Market Controller can reload the parameters to take effect immediately.

        • Article (29)

          The following Resolutions shall be cancelled forthwith from the date of this Resolution:

          (a) The Chairman of the Exchange Board of Director's Resolution No. 1/1998, regarding the Extension of the Trading Period at the Bahrain Stock Exchange.
          (b) The Director of the Exchange's Resolution No. 2/1995, regarding Order Execution Slips on the Exchange.
          (c) The Director of the Exchange's Resolution No. 12/1994, regarding Trading of Bahraini Joint Stock Companies Shares by Non-Bahraini Residents.
          (d) The Director of the Exchange's Resolution No. 19/1991, regarding Whole or Non Orders.
          (e) The Director of the Exchange's Resolution No. 11/1991, regarding Allowance of One Minute during the Trading Session.
          (f) The Director of the Exchange's Resolution No. 10/1991, regarding the Trading of Odd Lots.
          (g) The Director of the Exchange's Resolution No. 6/1991, regarding the Price Range on the Exchange.
          (h) The Director of the Exchange's Resolution No. 12/1990, regarding the Organization of Trading Operations on the Trading Floor.
          (i) The Director of the Exchange's Resolution No. 8/1990, amending the Trading Rules and Procedures.

    • Resolution No. (2) of 1990 in Respect of Certain Private Regulations of Securities Trading

      The Chairman of the Exchange's Board of Directors:

      After perusal of Decree Law No. (4) of 1987, pertaining to the establishment and organization of the Bahrain Stock Exchange;
      And upon the Minister of Commerce and Agriculture's Resolution No. (13) of 1988 concerning the issuance of the Bahrain Stock Exchange's Internal Regulations;
      And upon Resolution No. (1) of 1990 of the Exchange's Board of Directors in respect of Trading Excluded cases;
      And upon the Exchange's Board of Directors (Board Meeting No. (30) of 5/2/1990) Resolution concerning certain private regulations of securities trading;
      And upon the submission of the Exchange's Director;

      RESOLVED AS FOLLOWS:

      • ARTICLE ONE

        Securities in the name of others shall not be traded in, unless a Power of Attorney has been issued by them, or on the basis of a signed Transfer Request, except in the case of a father dealing in his minor son's securities.

      • ARTICLE TWO

        Sale or transfer or other type of transactions relating to securities which belong to individuals outside Bahrain, shall be based on a Power of Attorney from the concerned individuals.

      • ARTICLE THREE

        Securities may be transferred from the portfolio manager to the investor, in accordance with the Portfolio Management Contract and Transfer Request signed by the portfolio manager, or by any other authorized person, along with proof that authorizes the company in the management of the investment portfolio.

      • ARTICLE FOUR

        The Director of the Bahrain Stock Exchange shall implement this Resolution, which shall come into effect from the date of its issuance in the Official Gazette.

        The Minister of Commerce and Agriculture
        The Chairman of the Board of Directors
        of the Bahrain Stock Exchange

        Issued on 27 Shawaal 1410 H
        Corresponding to 22 May 1990

  • BHB Clearing, Settlement & Central Depository & Registry Rules

    1. Resolution No. (3) of 2000, in respect of the Clearing, Settlement, Central Depository and Registry Rules.
    2. Resolution No. (11) of 1999, in respect of transfer of shares ownership pursuant to an application signed outside the premises of Bahrain Stock Exchange.
    3. Resolution No. (1) of 1998, in respect of disclosure of certain Information concerning the trading of listed securities at the Bahrain Stock Exchange.
    4. Resolution No. (12) of 1991, in respect of procedural controls pertaining to the transfer of shares ownership by individuals from outside the state of Bahrain.

    • Resolution No. (3) for the Year 2000 with Respect to the Clearing, Settlement, Depository and Registry Rules

      The Chairman of the Board of Directors:

      After perusal of Amiri Decree No. (4) for the year 1987, regarding the establishment and organization of the Bahrain Stock Exchange;
      And the Minister of Commerce and Agriculture's Resolution No. 13/1988, regarding the issuance of the Bahrain Stock Exchange's Internal Regulations, as amended;
      And upon the submission of the Director of the Bahrain Stock Exchange;

      Have resolved as follows:

      • Article 1

        The attached provisions shall be applied temporarily during the testing period of the application of the CSDR system at the BSE. The BSE's Management shall develop such provisions during the said period and propose its issuance in a final form after ascertaining its compliance with the Electronic Trading Rules adopted by the BSE.

      • Article 2

        Notwithstanding the provisions of Article (1) above, the Director of the BSE may issue the necessary resolutions and procedures for the implementation of the provisions of this Resolution, and must inform the Chairman of the BSE's Board of Directors therewith from time-to-time. The Chairman may cancel or suspend the implementation of such resolutions or procedures.

      • Article 3

        Any resolution or provisions repugnant or inconsistent with the provisions of this Resolution shall be repealed forthwith.

      • Article 4

        The Director of the Bahrain Stock Exchange shall implement this Resolution, which shall be effective from the date of its signature.

        Ali Saleh Al Saleh
        Minister of Commerce
        Chairman of the Bahrain Stock Exchange's Board of Directors

        Issued on 23 Rajab 1412 H
        Corresponding to 21st October 2000

      • Article 5 Definitions

        For all purposes of these Rules, the following definitions shall apply, as stated below:

        The BSE: shall mean the Bahrain Stock Exchange.
        BATS: shall mean the BSE's Automated Trading System.
        CSDR System: shall mean the BSE's Clearing, Settlement, Depository and Registry System.
        CSU: shall mean the BSE's Clearing and Settlement Unit.
        Credit Balance: shall mean the net to receive amount resulting from trades concluded on the BSE by a Participant, and which the BSE is liable to pay within two working days after the trade date (T+2).
        Director: shall mean the Director of the Bahrain Stock Exchange.
        Debit Balance: shall mean the net to pay amount
        Deposited Securities: shall mean any securities that from time-to-time are credited to a Participant or his client's account through the CSDR System, either by deposit or delivery.
        Central Depository: shall mean a person or institution which meets the standards and qualifications required by the BSE with respect to financial ability, personnel, facilities, procedures, operations and equipment, and which shall provide to the Participants and Participants' clients depository services for the central handling of all securities.
        Depository Service: shall mean the service provided by the BSE to the Participants, whereby the BSE maintains accounts, recording the securities deposited and held by the Participants and their clients.
        Eligible Security: shall mean a security deemed eligible by the BSE pursuant to the BSE's Internal Regulations.
        The Participant: shall mean a BSE member who is accepted and permitted by the BSE to effect transfer of securities and other entries in relation to securities, by means of the CSDR System.
        Guarantee Fund: shall mean the Guarantee Contribution Fund established by the BSE to satisfy a liability caused by a Participant's failure to fulfill his obligations to pay the net to pay balance on the Settlement Day (T+2).
        Liquidity Reserve: shall mean an amount that a Participant is obliged to pay as an advance (collateral) for the fulfillment of settlement obligations, in accordance with the BSE's Trading Cap Limit rules.
        Purchased Securities: shall mean securities where the value has not been paid in full on the Settlement Day.
        Securities Account: shall mean a securities account maintained by the BSE on behalf of the Participants and their clients, for use in one or more of its services.
        Settlement Bank: shall mean the designated day for settlement of obligations resulting from trades on the BSE.
        The Central Securities Registry: shall mean a central information database where all securities deposited in the Central Depository, individual holders of such securities, and pledges and other third-party rights on securities, shall be recorded.
        Unique Identification Number: shall mean the Central Population Registry's Unique Identification Number for a Bahraini legal entity or individual person and identification number allocated by the BSE on the basis of passport, extract of the home country company register, or any other official document showing the identity of non-Bahraini legal entities or individual persons.

      • Article 6 Establishment of the Clearing, Settlement, Depository and Registry System

        The BSE shall maintain a CSDR system, whereby all securities bought and sold by the Participants are deposited, withdrawn, cleared, settled, and entered in the Central Securities Registry, and shall procure such financial support or guarantees as necessary to maintain its financial integrity.

      • Article 7 Entries in the Central Securities Registry

        The following shall be subject to entry in the Central Securities Registry:

        7.1 Eligible securities deposited in the Central Depository;
        7.2 Rights arising from deposited securities;
        7.3 Holders of securities;
        7.4 Pledges and other third party rights on securities;
        7.5 Limitations on the disposal of securities;
        7.6 Limitations on the transfer of such securities.

      • Article 8 Elements for Entry of the Security

        The following elements shall be entered into the Central Securities Registry:

        8.1 Type and class of security;
        8.2 Name, registered office and the Commercial Registration (CR) number of the issuer;
        8.3 Name of the legal owners of the security; their Unique Identification Numbers, registered office or permanent home address, and number of securities owned;
        8.4 Designation of the issuer's obligation and owner's rights arising from the security;
        8.5 Nominal value of the security;
        8.6 Total nominal value of the whole issue of the security;
        8.7 Date of issue.

      • Article 9 Book-Entries

        Securities entered into the Central Securities Registry shall be transferred, acquired, limited or terminated by the appropriate book-entry on the securities accounts in the Central Securities Registry.

      • Article 10 Securities Accounts

        10.1 Accounts opened on the Central Securities Registry must be maintained to show the balances of individual holder's accounts, the transfer of securities, and any other pledges and third-party rights.
        10.2 A securities account must contain all information regarding the securities of individual holders, information regarding the holder of the securities, and with the Unique Identification Number of the holder. Any limitations on exercising the rights arising from the security, pledges, other third-party rights on the security and any other information relating to the rights arising from the security must also be recorded.
        10.3 The legal owner of the security shall be the person to whose credit the security is entered into the Central Securities Registry on the securities account.

      • Article 11 Disposal of Securities

        11.1 Securities maintained on the securities accounts shall be transferred or disposed of on the basis of a written transfer order, issued by the holder of the securities.
        11.2 The transfer order shall contain at least the following elements:
        11.2.1 Name and registered office, or the address of the existing and the new holder;
        11.2.2 Unique Identification Number of the existing and new holder;
        11.2.3 Security code allocated by the Central Securities Registry;
        11.2.4 The number of securities subject to transfer or disposal;
        11.2.5 Legal basis of transfer;
        11.2.6 The Participant's code entering the transfer into the Central Securities Registry;
        11.2.7 Signature of the existing holder.
        11.3 An order for the entry of a pledge or any other third-party rights must contain the following elements:
        11.3.1 Name and registered office, or the address of the securities holder and the beneficiary;
        11.3.2 Unique Identification Number of the securities holder and the beneficiary;
        11.3.3 Security code allocated by the Central Securities Registry;
        11.3.4 Number of securities subject to disposal;
        11.3.5 Content of the right and legal basis for disposal;
        11.3.6 Amount and maturity of claim which is secured by the pledge;
        11.3.7 Participant's code for entering the transfer into the Central Securities Registry;
        11.3.8 Participants authorized to execute (sell, pledge, call) the pledge on behalf of the beneficiary;
        11.3.9 Signature of the securities holder.
        11.4 Transfer orders for individual holders for:
        11.4.1 The transfer of securities to the securities account of the existing holder (movement);
        11.4.2 The transfer of securities to the securities account of the new holder (transfer);
        11.4.3 The entry or release of a pledge, or any other third party rights on a security;
        shall be entered into the Central Securities Registry by the Participant, who maintains a securities account on behalf of an individual holder. All other book-entries shall be entered and executed into the Central Securities Registry by the CSU.
        11.5 Transfer orders of an individual holder for entry or release of a lien, or other third-party rights, shall be entered by the Participant directly into the Central Securities Registry through an electronic communication line to the Central Securities Registry and CSU.
        11.6 The CSU shall execute the transfer of securities according to the holder's transfer order if the balance on the securities account is sufficient, and there is no legal obstacle for execution.
        11.7 It shall be deemed that an obstacle for execution exists if:
        11.7.1 A limitation on the disposal of securities exists in accordance with Article 45 of these Rules;
        11.7.2 A legal basis for transfer is not exempt pursuant to Article 36 of the BSE's Internal Regulations and Resolution No. 13/1988, as amended by Resolution No. 8/1993.

      • Article 12 Transfer Order on the Basis of a Daily Trade Report

        12.1 For trades transacted on the BSE, obligations to transfer the securities arising from such trades shall be fulfilled on the basis of a Daily Trade Report, provided by the BSE's Trading and Members Affairs Unit for that purpose.
        12.2 The transfer of securities to the new holder's account, notwithstanding Article (11) of these Rules, shall be deemed that a security holder has issued to the trading Participant an order for the transfer of securities from his account to the account of the new holder, in order to fulfill the obligations arising from the trade carried out at the BSE, on behalf of the securities holder.

      • Article 13 Execution of Transfers and Entries

        13.1 The transfer of securities and entry on the accounts on the basis of court orders and any other administrative or governmental orders, shall be entered into the Central Securities Registry directly by the CSU.
        13.2 The CSU shall conduct the transfer and any other entry, on the basis of a received copy of the court or administrative order.

      • Article 14 Execution Order and Universal Succession

        14.1 In the case of a court execution order for the collection of a claim, the right of a lien on securities for the benefit of the creditor shall be entered into the Central Securities Registry, on the debtor's securities account.
        14.2 For the execution of a lien entered on the basis of a court order, securities shall be transferred to the buyer's securities account on the basis of that court order, or on the basis of trade carried out by the Participant authorized by the court to sell the securities in question on behalf of the creditor.
        14.3 In the case of a court order for the execution and delivery of securities to the creditor, such securities shall be transferred through the Central Securities Registry from the debtor's securities account to the creditor's account.
        14.4 In the case of a universal legal succession (inheritance, liquidation of a company etc.), the securities shall be transferred from the holder's account to the successor's account on the basis of the final order on inheritance, liquidation, or other relevant title through public notification in the case of liquidation.
        14.5 In the case of other transactions exempt from execution on the Trading Floor, securities shall be transferred from the holder's account to the beneficiary's, subject to Article (36) of the BSE's Internal Regulations and Resolution No. 13/1988, as amended by Resolution No. 8/1993.

      • Article 15 Registration of the Transfer of Securities

        15.1 Pursuant to Article (7) hereof, the CSU shall, on behalf of the issuer, enter and maintain the relevant data of registered securities on the Central Securities Registry. Transfers of securities, pledges and any other third-party rights within the Central Securities Registry shall be deemed legal for the relevant entry in the issuer's share-book, or any other Registry used for the issuer's securities.
        15.2 For the purpose referred to in sub-Article (15.1) above, the CSU shall provide to the issuer or authorized transfer agent, information regarding the holders of securities of such issuer on a periodical basis, as agreed between the relevant parties.
        15.3 The CSU shall provide the issuer or its transfer agent with a list detailing:
        15.3.1 the name and address or registered office of the holder;
        15.3.2 the number of a security held by the holder, as of a specific date.

      • Article 16 Maintenance of Data

        16.1 Information regarding securities holders maintained in the Central Securities Registry shall be regularly updated. The CSU and Participants shall regularly update the following information, in accordance with the securities holder's instruction given to the CSU or the Participant to maintain the securities account for the holder, and the information received from the Ministry of Commerce's Commercial Registry, the Central Population Registry and any other entity regarding the update of the said information.
        16.1.1 A change of Unique Identification Numbers of the securities holder;
        16.1.2 A change of name of the securities holder;
        16.1.3 A change of address or registered office of the securities holder;
        16.1.4 A change of legal status of the securities holder;

      • Article 17 Access to the Database

        17.1 No person shall have the right to access the database maintained in the Central Securities Registry, which would enable him to obtain information on a particular person as a holder of one or more securities, or to obtain information regarding transfers or other entries in respect of a particular person.
        17.2 Notwithstanding the provision of the preceding sub-Article (17.1) above, the securities holder and the court shall have the right to demand any information regarding the balance, transfer and any other entry on his securities account, pursuant to the procedure and charges prescribed by the BSE.
        17.3 Notwithstanding the provision of sub-Article (17.2) above, the court shall have the right to demand the information regarding the balance, transfers and other entries on a particular person's securities accounts, if such information is required, pursuant to the legal proceedings relevant to such securities holder.
        17.4 Any other information regarding a Participant's securities account, clearing account and operating account shall be kept confidential by the BSE and the Settlement Bank respectively.

      • Article 18 Services to the Participants

        The CSU shall provide the Participants with the following services:

        18.1 Depository services for securities issued as physical certificates;
        18.2 Deposits and withdrawals of securities on their own behalf, or on behalf of holders of securities;
        18.3 Maintenance in the Central Securities Registry of deposited securities, and in connection with:
        18.3.1 up-to-date balances for the Participant's securities accounts;
        18.3.2 up-to-date balances on the accounts of individual holders of securities;
        18.3.3 book-entry transfers on the securities accounts of both the Participants and individual holders of securities;
        18.3.4 book-entries of pledges and other third-person rights on securities;
        18.3.5 other entries and updates relating to securities accounts and securities holders.
        18.4 Clearing and settlement of payment obligations arising from BSE trades and in connection with:
        18.4.1 calculation of the total amounts payable and receivable by individual Participants.
        18.4.2 determination of net amounts payable and receivable by individual Participants.
        18.4.3 ensuring the execution of cash payment obligations and fulfillment of transfer of ownership obligations.
        18.5 The CSU may effect on behalf of the Participants and their clients other services with respect to securities, including but not limited to, borrowing, lending, settlements, credit and debit of dividends, interest payments and other distribution services, and processing of issuer's securities undergoing reorganization.

      • Article 19 Participants Services to Clients

        A Participant may provide his clients (individual holders of securities) through the CSU with the following services:

        19.1 Opening and closing different types of securities accounts;
        19.2 Maintaining different types of securities accounts, including but not limited to:
        19.2.1 delivery and receipt (transfers and movements) of securities to the securities accounts, with the entry and dispatch of proper transfer instructions;
        19.2.2 inquiries of balances and transactions regarding the securities accounts;
        19.2.3 reports on balances and transactions regarding the securities accounts of the Participant's clients.
        19.3 Deposits and withdrawals of securities in the Central Depository and to the securities accounts;
        19.4 Settlement of money obligations arising from trading in securities on behalf of clients;
        19.5 Effecting transactions related to entries, releases and executions of pledges, upon instructions from clients or third parties (pledgee);
        19.6 Updating the securities account information in respect of a client, upon the client's instructions.

      • Article 20 Participants Allowed to Participate in the CSDR System

        Application to become a Participant shall be limited to applicants who are members of the BSE, pursuant to Articles (15) and (16) of the BSE's Internal Regulations and the Resolutions passed thereunder.

      • Article 21 Participation Requirements

        21.1 The BSE shall approve the application of any member wishing to be a Participant in the CSDR System, if the applicant meets the following criteria:
        21.1.1 The applicant has sufficient financial ability to pay his anticipated contribution to the Guarantee Fund and the calls for additional funds by the BSE, as and when required;
        21.1.2 The applicant has shown that he has adequate personnel, physical facilities, suitable computer equipment compatible with that of the BSE, books, records, and procedures to fulfill his anticipated commitments to the BSE and to other Participants;
        21.1.3 The applicant has shown that he has and maintains appropriate money accounts with the Settlement Bank for the purpose of payments and receipt of the amounts arising from trades concluded on the BSE.
        21.2 The BSE shall approve or decline the application no later than 15 days from the receipt of such application, unless the application is incomplete or deficient, or there are reasonable grounds to believe that the applicant may not honour his commitments to the BSE.
        21.3 An applicant may become a Participant upon payment to the BSE of his contribution to the Guarantee Fund and the execution of a CSDR Membership Agreement with the BSE, whereby he undertakes:
        21.3.1 To abide by the BSE Law, Regulations, Procedures and their amendments.
        21.3.2 To pay to the BSE, fees, charges and costs for services rendered, and any surcharges as may be imposed by the failure of the Participant to discharge his obligations.
        21.3.3 That except as otherwise permitted by the BSE, to give all instructions concerning securities, clearing, settlement, depository and registry services through the BSE, and not otherwise.
        21.4 Notwithstanding the foregoing, the BSE may decline to accept the application of any candidate, upon determination that the BSE does not have adequate data processing capacity, or other operational capabilities at that time to furnish services to additional Participants, without impairing the ability of the BSE to provide such services. Applications which are denied pursuant to this provision shall be processed as promptly as possible, in the order in which their applications were filed with the BSE.

      • Article 22 Participant's Rights and Obligations

        22.1 A Participant shall at all times comply with the BSE Law, Regulations, Resolutions and Procedures, and any amendments to such Law, Regulations, Resolutions and Procedures.
        22.2 A Participant shall at all times ensure that before entering the sell transaction on his own securities account, or on behalf of his client's securities account, there is sufficient securities balance on such securities accounts.
        22.3 A Participant shall ensure that there are, at all times, sufficient funds for the purpose of fulfilling all his financial obligations resulting from his trading in securities.
        22.4 A Participant shall submit to the BSE the following reports:
        22.4.1 Copies of unaudited semi-annual financial statements (prepared in accordance with generally accepted accounting standards).
        22.4.2 Copies of annual financial statements, audited by independent public accountants, within three months of the fiscal year-end.
        22.5 A Participant shall, except as otherwise permitted by the BSE, give all the instructions concerning the securities through the CSU, and not otherwise.
        22.6 A Participant's books and other records relating to his operations with the CSU shall be open to the inspection of the duly authorized representative of the BSE at all times.

      • Article 23 Securities Accounts

        23.1 All Participants and their clients must open and maintain accounts in the CSDR System, before being allowed to conduct any buying or selling activities on the BSE.
        23.2 The CSU shall open and maintain in the Central Securities Registry securities accounts (»house accounts«) for the Participants, and enable them to open and maintain securities accounts for their clients (»client accounts«), over which the Participant shall have the authority to instruct the CSU, on behalf of the holder of securities, on any transactions and operations in the Central Securities Registry.
        23.3 A Participant and his clients shall record on their securities account deposited securities, and reflect any transactions and balances of securities, pledges, and any other third-party rights on securities.

      • Article 24 Access to the Information System

        24.1 The Participant shall authorize one or more of his employees to access the computer processing activities for the BSE's on-line services. The Participant shall appoint a security administrator, who shall be responsible for giving the Participant's employees access to the computer processing activities, and to assigning them with a password recognized by the BSE. The Participant's security administrator shall promptly notify the CSU of any change in the form currently on file with the CSU.
        24.2 Each Participant's files with the CSU shall have a list of designated authorized signatories, specifying the name, function and telephone number of the designated employee as an authorized signatory, and a specimen signature of that employee. The authorized signatory shall be empowered to act on behalf of and in the name of the Participant for all purposes relating to clearing and settlement in accordance with these Rules, and the Participant shall be responsible for any document signed by such authorized signatory.
        24.3 Each Participant and each securities account shall be allocated with a Unique Identification Number, which must be used at all times.
      • Article 25 Charges and Fees

        25.1 Notwithstanding the fees provided for in Article (53) of the Internal Regulations, and the Resolutions passed thereunder, the BSE shall adopt, and may from time-to-time amend, a non-discriminatory schedule of charges for services rendered according to these Rules.
        25.2 Notwithstanding any charges levied by the BSE in accordance with Article (14) of the BSE Law and Article (73) of the Internal Regulations and the Resolutions passed there under for violation of the BSE Law, and the Internal Regulations as amended, the BSE may impose a surcharge for conduct likely to impede the operations of the BSE, provided that no surcharge for any given offence shall exceed the sum of BD5,000.
        25.3 Subject to Article (25.2) above, the BSE shall impose on the Participant who fails to discharge his clearing and settlement obligations on T+2, a default charge of BD20 for a transaction not exceeding BD10,000, and BD20 for each BD10,000 thereafter. The charge shall be imposed for each day of default, until the failing Participant discharges his clearing and settlement obligation in full.

        The defaulting Participant may seek compensation in lieu of such a charge from his client, if the Participant's failure to discharge his clearing and settlement obligation is due to the client of such Participant.

      • Article 26 Sufficient Cause for the Limitation of Activities

        26.1 The BSE may at any time, suspend or limit the activities, functions or operations of a Participant, or any service provided by the BSE, either with respect to a particular transaction, or transactions in general, in the event that:
        26.1.1 The Participant has failed to make timely payment of net money obligations, or any other amount payable to the BSE;
        26.1.2 The BSE has determined that the Participant no longer meets the financial, operational or technical qualifications prescribed in the Internal Regulations, or any other rules, or has materially violated any agreement with the BSE;
        26.1.3 The CSU has reasonable grounds to believe that the Participant is in financial difficulty, or will otherwise be unable to meet his obligations towards the BSE, or other Participants;
        26.1.4 The Participant has been suspended from trading services or his membership at the BSE has been terminated.
        26.2 If the BSE ceases to provide its services to a Participant pursuant to this Article, it may either eliminate the operations and all pending transactions to which such a Participant is a party, or allow him to complete such pending transactions. If the BSE eliminates the pending transactions from its operations, such transactions shall be completed by such Participant directly with the other Participants.

      • Article 27 Termination of Services

        27.1 The BSE's services to Participants may be terminated according to these Rules:
        27.1.1 Upon a Participant's written request, giving thirty days notice for termination;
        27.1.2 In the event that a Participant is terminated from the BSE's Membership Registry, according to Article (32) of the BSE's Internal Regulations;
        27.1.3 In the event of bankruptcy or liquidation proceedings against the Participant, pursuant to Article (23) of these Rules.
        27.2 Upon reaching a decision regarding the suspension, limitation or termination of services to the Participant, the BSE shall promptly notify the aggrieved Participant, other Participants and the Settlement Bank in respect of such decision.
        27.3 After reaching such a decision regarding the procedure for termination of services, and until the final notice of termination of services has been issued, all securities held for the account of such Participant, or his clients, shall be transferred to the securities accounts held with one or more of the other Participants, subject to arrangements reached with the concerned parties.

      • Article 28 Fungability

        28.1 Securities of the same class deposited at the Central Depository are considered equal. Any number or par value of such a security is the equivalent to the same number or par value of any other security. The Central Depository shall not be under any obligation to issue securities certificates for Participants or their clients with the same serial numbers of their deposited securities.
        28.2 Deposited securities may be transferred, pledged or subject to any other transaction through entries in the securities accounts maintained in the Central Securities Registry, without physical delivery of a securities certificate.

      • Article 29 Deposits and Withdrawals

        29.1 Securities shall be deposited or withdrawn from the Central Depository solely by the Participants, either on their own behalf, or on behalf of their clients.
        29.2 Delivery of a security (deposit) to the Central Depository by a Participant shall be credited to the balance position of the securities account nominated by the Participant (house or client account), and a withdrawal of a security from the Depository shall be debited to the balance position of the securities account nominated by the Participant.

      • Article 30 Deposit Processing

        30.1 Participants may deposit or withdraw securities at the Central Depository on any business day, and during such hours as may be prescribed by the BSE.
        30.2 Participants may deposit or withdraw securities by:
        30.2.1 Entering the security deposit or withdrawal request (transaction) into the CSDR System.
        30.2.2 Posting the security deposit or withdrawal request (transaction) into the CSDR System.
        30.2.3 Delivering or withdrawing the securities certificates held in the Central Depository.
        30.3 All securities deposits shall be accompanied by a deposit advice, which shall be undamaged and in good order. Each Participant warrants to the BSE that all securities delivered or deposited with the Central Depository shall be valid and genuine. Neither the initial receipt of such securities, nor the crediting of such receipt to the Participant's nominated account position shall constitute a waiver of such warranty.
        30.4 Securities received by the Central Depository shall be processed as of the same/next business day. The deposit or withdrawal shall be checked by the Central Depository and double-checked by the Participant as to number and transferability.
        30.5 The Central Depository shall, through the CSU, approve the deposit or withdrawal into the CSDR System unless:
        30.5.1 The securities check indicates that there are discrepancies between the securities delivered or received, and the attached deposit or withdrawal advice;
        30.5.2 There are omissions on the deposit or withdrawal advice;
        30.5.3 The securities are invalid, not genuine, or damaged;
        30.5.4 There is no sufficient position in the relevant securities account for a securities withdrawal;
        30.5.5 Any other reason prescribed by the BSE.
        30.6 The Central Depository shall in such events through the CSU, reject the delivery or withdrawal and enter the rejection into the CSDR System.

      • Article 31 Effectiveness of Deposit or Withdrawal

        31.1 Upon the CSU's approval of deposit or withdrawal into the CSDR System, the deposited securities shall be credited to the balance position of the securities account nominated by the Participant (house or client account), and withdrawal of a security from the Central Depository shall be debited to the balance position of the securities account nominated by the Participant.
        31.2 Upon crediting the securities to the securities account, such securities shall be eligible for the Central Securities Registry operations and transactions.
        31.3 Prior to effecting a sell trade on a particular security, and for which security there is no sufficient position in the relevant securities account at that time, the Participant shall deposit the securities in the relevant securities account in a quantity sufficient to ensure the settlement of such security pursuant to the trade.

      • Article 32 Clearance and Settlement through the Exchange

        All trades executed on the BATS shall be reported and submitted for clearance to the CSU for settlement by the delivery of securities and payment through the Settlement Bank on Settlement Day (T+2), by means of the transfer of securities coinciding with payment of net money balances.

      • Article 33 Netting of the Money Claims and Obligations

        33.1 Upon the clearance of the Participant's trades for all transactions executed through BATS on the Settlement Day, all money claims deriving from such trades shall be transferred to all the Participants who are considered as the new creditor. At the same time, the Participants shall assume that all money obligations deriving from such trades belong to the new holders.
        33.2 It is considered that an agreement on transferring the claims to the Participants and the obligation has been concluded upon the execution of the trade on the BSE.
        33.3 The Participants shall compensate all money claims transferred from a particular Participant against equal obligations assumed by the other Participants. The surplus of money claims over money obligations (Participant's net to pay balance), or the surplus of money obligations over money claims (Participant's net to receive balance), as the case may be, and which were not compensated, shall represent each Participant's net to pay or net to receive balance due for payment on the Settlement Day (T+2).
        33.4 Information regarding:
        33.4.1 All money obligations and claims arising from the trades executed by the Participants on their behalf and on behalf of their clients;
        33.4.2 Projected gross and net money obligations or claims;
        33.4.3 Amount of Liquidity Reserve;
        shall be immediately communicated after the trade execution to each Participant on-line through the CSDR System.
        33.5 Information regarding net to pay balance, or net to receive balance shall be final and irrevocable on the next business day following the trade day (T+1), no later than 12:00 hours. Information regarding the Liquidity Reserve shall be final and irrevocable on the trade day (T+ 0), no later than 13:00 hours.

      • Article 34 Payments of Net Amounts

        34.1 All net funds payment obligations arising on the Settlement Day (T+ 2) are effected and settled by the Settlement Bank through the Participant's clearing account and the BSE's clearing account.
        34.2 Participants shall settle transactions with their clients through their operating accounts, subject to the agreement between them, provided that the net to pay balance amount is available in the Participant's clearing account on the Settlement Day (T+2), not later than 09:30 hours.
        34.3 Participants having a net to pay balance amount shall ensure that funds are available in their clearing account with the Settlement Bank on the Settlement Day (T+2) no later than 09:30 hours, with an instruction to the Settlement Bank for such funds to be credited to the BSE's clearing account.
        34.4 If the CSU establishes that:
        34.4.1 All Participants with a net balance due to pay have credited the BSE's clearing account with the same amount; and
        34.4.2 Upon the notice of the Settlement Bank to the CSU regarding instructions to all Participants for the funds to be credited to the BSE's clearing account, and immediately after 09:30 hours on the Settlement Day, each Participant having a net balance due to receive will be credited with the amount from the BSE's clearing account to the Participant's clearing account with the Settlement Bank.
        34.5 Payments of net to pay or net to receive balance amounts to the BSE's clearing account shall be final and irrevocable. A Participant or the BSE cannot revoke, cancel, return or otherwise refuse to pay, or attempt to prevent any payment to or from the clearing account.
        34.6 Information in respect of Participants net to pay balance and net to receive balance amounts shall be communicated to the Settlement Bank through the CSDR System, by any means of communication agreed upon by the Parties.

      • Article 35 Trading Cap Limit

        35.1 The BSE may limit the Participants trading services (bid orders) subject to the Trading Cap limit fixed by the BSE, in accordance with the following formula:

        Cap Limit = Collateral + (Capital x Risk Factor)
        (Number of Settlement Days + Reserve Settlement Days) X Maximum Risk
        35.2 The 'Risk Factor' referred to in sub-Article (35.1) above shall be 1/3, 'Settlement Days' shall be 3 working days, 'Reserve Settlement Days' shall be 3 working days, and the 'Maximum Risk' shall be 10% per day.
        35.3 The BSE may increase or decrease the Participant's Trading Cap Limit, depending on relevant factors such as the Participant's frequency and volume of his trading activities, his financial position, solvency, ability to increase his contribution to the Guarantee Fund, his past experience in the settlement of transactions executed, the client's financial position, liquidity of securities and volume of the transactions intended to be executed.

      • Article 36 Liquidity Reserve

        36.1 For the purpose of ensuring the Participant's financial ability to meet his settlement obligations on the Settlement Day (T+2), Participants are required to pay into the Liquidity Reserve account the full value of the transaction, as follows:
        36.1.1 30% of the trading transaction on (T+1), no later that 09:30 hours.
        36.1.2 70% of the trading transaction on (T+2) before 09:30 hours.
        36.2 All Liquidity Reserve payment obligations shall be effected through the BSE's Liquidity Reserve account, and settled on the BSE's clearing account.
        36.3 In the event that a Participant fails to pay the required Liquidity Reserve amount, the BSE shall immediately cease to provide trading, clearing and settlement services to the defaulting participant.
        36.4 It shall be deemed that a Participant failed to pay the Liquidity Reserve amount by 09:30 hours on T+1, if the CSU did not receive confirmation from the Settlement Bank that the Participant has submitted the appropriate payment to the Liquidity Reserve amount.
        36.5 In the event that a Participant fails to pay the required Liquidity Reserve amount, such amount shall be added to the Participant's net to pay balance due for payment on the Settlement Day.

      • Article 37 Purpose of the Guarantee Fund

        The BSE's Board of Directors may establish a Guarantee Contribution Fund to be utilized by the BSE, at its own discretion, to satisfy a liability caused by a Participant's failure to fulfill his obligation to pay the net to pay balance amount.

      • Article 38 Participants Contributions

        38.1 The minimum contribution of each Participant to the Guarantee Fund shall be fixed by the BSE, in accordance with a formula based upon the Participant's anticipated settlement obligations, at the time such Participant's application for participation is approved.
        38.2 Notwithstanding the above, the BSE may fix the Participants' contributions on a basis other than the formula specified in sub-Article (34.1) above.
        38.3 Contributions made by a Participant must be paid in cash to the Guarantee Fund account.
        38.4 Participants contributions to the Guarantee Fund account may, from time-to-time, be increased or reduced by the BSE, in accordance with the foregoing formula or any other basis. The BSE may also require any Participant to make additional contributions to the Guarantee Fund account, based upon current (net or gross) settlement obligations.
        38.5 Participants must at all times maintain the fixed minimum Guarantee Fund contribution established by the BSE.
        38.6 Notice of any change to the fixed or additional contribution amount shall be given to each Participant at least three business days prior to the effective date of the change. Payment of the additional contribution in the Guarantee Fund account shall be made within 5 business days after the notice.

      • Article 39 Management of the Guarantee Fund

        39.1 Contributions to the Guarantee Fund account must be segregated from the BSE's assets, but need not be segregated from the other Participants assets.
        39.2 Cash contained in the Guarantee Fund account may be partially or wholly invested by the BSE or by the Settlement Bank, pursuant to the Agreement between the BSE and the Settlement Bank. Any interest received from such investments or deposits of cash contributions, which are in excess of the minimum cash contributions less the BSE's maintenance fees, shall be accrued to the Participants not in default of their obligations under these Rules.

      • Article 40 Application of the Guarantee Fund Account

        40.1 If a Participant fails to pay his net to pay balance amount on the Settlement Day (T+2) no later than 09:30 hours, the amount of deficiency shall be debited from the Guarantee Fund account and credited to the BSE's clearing account.
        40.2 If the amount of the undischarged obligation to pay the net to pay balance exceeds the amount of the failed Participant's contribution, the amount of deficiency shall be debited pro-rata against all other Participants' contributions to the Guarantee Fund account, on the basis of their respective contributions, and credited to the BSE's clearing account.
        40.3 A Participant who fails to pay the net to pay balance amount shall be liable to refund the amount debited to the Guarantee Fund account, and all costs relating to the use of the Guarantee Fund, as determined by the BSE.
        40.4 In the case of a Participant's failure to pay the net to pay balance amount, the BSE shall, immediately after 09:30 hours on T+2 (and until the amount is honoured in accordance with sub-Article (40.3) above), suspend the defaulting Participant from:
        40.4.1 Any trading services provided by the BSE, with respect to securities transactions generally.
        40.4.2 All services and activities in relation to clearing, settlement, depository and registry functions, or operations of a Participant, except the services in relation to the pending settlement obligations of such Participant.

      • Article 41 Disposition of the Participants' Purchased Securities

        41.1 To secure the due payment of net to pay balance amounts due from the Participant to the BSE, the BSE shall have the right to dispose of all or any securities purchased in favour of the Participant, provided that the right of disposition shall subsist until such time as the Participant's obligations have been fulfilled.
        41.2 In case a Participant fails to refund the amount debited to the Guarantee Fund account and cover all the costs relating to the use of the Guarantee Fund, the BSE may be obliged to authorize the selling of all or any of the securities referred to in sub-Article (41.1) hereof by another Participant. Such a sale shall be made at the BSE without further notice to the said Participant. The proceeds of the sale (net of commission, costs, fees and expenses) shall be paid into the Guarantee Fund account.

      • Article 42 Disposition of Clients' Purchased Securities

        42.1 To secure payment of the amount due from clients to a Participant arising from trading of securities, the BSE shall have the right to dispose of all or any securities purchased for the defaulting client, provided that the right of disposition shall subsist until such time as the client's obligation has been fulfilled.
        42.2 In case a client fails to discharge his obligations towards the Participant, the BSE may be obliged to authorize the selling of all or any of the securities referred to in sub-Article (42.1) hereof by another Participant. Such a sale shall be made at the BSE without further notice to the said client. The proceeds of the sale (net of commission, costs, fees and expenses) shall be used for the settlement of all the client's obligations towards the Participant.

      • Article 43 Return of Securities and Other Property

        In the event that the BSE terminates its services to a Participant, such Participant's contribution to the Guarantee Fund account and the securities deposited in his account with the Central Depository shall be returned to that Participant as soon as possible, provided that the Participant has satisfied all his obligations to the BSE.

      • Article 44 Position Before the Trade

        No Participant shall accept and effect an order to sell securities on the BATS on his own behalf, or on behalf of his client unless:

        44.1 The Participant has received securities certificates and deposited such certificates with the Central Depository, pursuant to Articles (46) and (47) of these Rules;
        44.2 Has received confirmation from the CSU that the deposit of securities has been approved.

      • Article 45 Settlement

        45.1 Each and every trading transaction executed on the BSE must be settled in accordance with the provisions of the CSDR Rules, no matter whether the buyer intends to resell the purchased securities in the same trading session, or otherwise. The Participant shall be liable to discharge the settlement obligations and any other consequential charges and penalties for non-compliance with the provisions of the above paragraph.
        45.2 The book-entry transfer of securities shall be effected by the CSU in the Central Securities Registry on the Settlement Day (T+2), by debiting the seller's securities account and crediting the buyer's securities account.
        45.3 A seller's position in his securities account, subject to trade, shall not be effected by any transfer or entry of such security, until the final settlement for such a contract has been made.
        45.4 Notwithstanding the provisions of sub-Article (45.1) above, in case of a failed trade deemed to compromise the integrity of the settlement system, the settlement of the said transaction may be rolled over, subject to the CSU's discretion, and marked-to-market outside the netting system until the buy-in or sell-out date, at which the transaction will be settled.

      • Article 46 Opening the Securities Account

        46.1 Prior to opening and maintaining securities accounts in the Central Securities Registry on behalf of his clients (»client account«), the Participant shall make adequate verification of the client's identification.
        46.2 Any instruction to change, update or correct a securities account regarding the name, permanent address, or registered office and Unique Identification Number shall be given to the CSU by the Participant, on behalf of his client. Any other change, update or correction shall be made by the Participant.

      • Article 47 Transfers on the Participant's Instruction

        47.1 The following transfers, movements and entries without the corresponding funds shall be effected in the Central Securities Registry upon the Participant's instruction to the CSU, on the basis of a transfer order issued by the holder of the securities:
        47.1.1 Transfers of securities between accounts of the securities holder, opened by the same or different Participant (movements);
        47.1.2 Transfers of securities to the new securities holder's account, opened by the same or different Participant (transfers);
        47.1.3 Entries in relation to pledges and other third party rights on securities:
        47.1.3.1 entry of pledge;
        47.1.3.2 release of pledge
        47.1.3.3 transfer of securities subject to pledge execution;
        47.1.3.4 entries in relation to any other third party rights on securities.
        47.1.4 Transfers in accordance with Article (36) of the BSE's Internal Regulations and Resolution No. 31/1988, as amended by Resolution No. 8/1993.
        47.2 Prior to the effect of any transfer, movement, or entry into the Central Securities Registry on behalf of his clients, the Participant shall make adequate verification of the client's identity and the validity of the respected transfer order.

      • Article 48 Transfer Processing

        48.1 Participants may effect transfers, movements, or any other book-entries on any business day, and during such hours as may be laid down in the prescribed procedures.
        48.2 Participants may effect transfers, movements, or any other book-entries (transaction) in connection with securities accounts on their own behalf, or on behalf of a securities holder (client) by:
        48.2.1 Verifying the terms of the legal basis of transfer, movement, or entry;
        48.2.2 Entering the appropriate information regarding the transaction into the CSDR System.
        48.2.3 Posting the transaction into the CSDR System.
        48.2.4 Sending a copy of the respective transfer order to the CSU.
        48.3 A copy of the transfer order referred to in sub-Article (48.2) above shall be considered with the BSE when given in writing to the CSU's designated staff, delivered to the BSE's address, or sent by facsimile to the facsimile number prescribed by the CSU (and followed by the Participant's telephone call to the CSU's designated staff, confirming that the facsimile message has been properly received).
        48.4 Posted transactions shall be processed not later than three business days after receipt of the copy of the transfer order, as referred to in sub-Article (44.3) above, provided that the enabling documents are complete and sound.
        48.5 The CSU shall approve the entry of appropriate information into the CSDR System unless:
        48.5.1 The transfer order check indicates that there are discrepancies or omissions between the transfer order and the relevant (posted) information in the CSDR System;
        48.5.2 There is no sufficient position in the relevant securities account;
        48.5.3 There is a limitation on the disposal of securities, in accordance with Article (45) hereof;
        48.5.4 The legal basis for the transfer is not exempt, pursuant to Article (36) of the BSE's Internal Regulations, and Resolution No. 13/1988, as amended by Resolution No. 8/1993.
        48.6 In the above cases, the CSU shall reject the transaction and enter such rejection into the CSDR system.
        48.7 The CSU shall have no obligation to verify the terms of the legal basis of transfer, movement, or entry, or compliance by either Participant or Parties to a contract.

      • Article 49 Pledge

        49.1 A pledge of securities shall be effected in the Central Securities Registry by the Participant maintaining the securities account for the holder, on the basis of an order issued by the holder of such securities, and the pledge transaction containing all relevant information regarding the pledge is entered into the CSDR System on behalf of the client.
        49.2 Securities pledged in the Central Securities Registry are identified as pledged to the pledgee, and recorded in the appropriate holder's securities account. Securities pledged may be dealt with, or be subject to any other transfers or movements exclusively in accordance with the instruction issued by the pledgee.

      • Article 50 Unavailable Position

        Securities that are pledged are no longer eligible for any transaction on the BSE, unless first released by the pledgee.

      • Article 51 Realization

        In the event of a pledgor's default to meet his principal obligation secured by a pledge of securities, the pledgor authorizes and directs the Participant maintaining the holder's securities account to comply with any instruction from the pledgee to sell such securities.

      • Article 52 Release

        After the termination of the pledge, Participants maintaining the holder's securities account subject to the pledge shall effect a release of the pledge in the Central Securities Registry, pursuant to an order issued by the pledgee, and enter the relevant information regarding the release of a pledge into the CSDR System.

      • Article 53 Transfers and Entries

        53.1 The following transfers and entries shall be effected in the Central Securities Registry directly by the CSU in the CSDR System, subject to an order issued by the court or any other administrative body, including but not limited to:
        53.1.1 Hereditary transfers of securities;
        53.1.2 Limitation of the disposal of securities according to an execution or enforcement order issued by a court, pursuant to Chapter Four of the Bahrain Civil and Commercial Procedures Law (1971) (hereinafter referred to as the CCP);
        53.1.3 Transfers of securities according to an interim order issued by the execution court, pursuant to Chapter Eight of the CCP;
        53.1.4 Entry of a lien, realization (sale or transfer) and removal of a lien (distress) on securities, according to the enforcement order (distress statement) against a debtor's property issued by the execution court, pursuant to Article (273) and Article (280) of the CCP.

      • Article 54 Transfer and Entry Processing

        54.1 The CSU shall effect any transfer or entry pursuant to an instruction which must be attached with a true and original copy of the relevant court order delivered for execution purposes, in accordance with Article (261) of the CCP.
        54.2 The CSU shall effect a transfer, movement, or any other book-entry (transaction) in connection with a securities account, either on its own or on behalf of the securities holder (client) by:
        54.2.1 Verifying the relevant copy of the court order;
        54.2.2 Entering the appropriate information regarding the transaction into the CSDR System.
        54.2.3 Posting and approving the transaction into the CSDR System.
        54.3 In the case of an enforcement order (distress statement) issued pursuant to Article (280) of the CCP, instructing the CSU to effect a lien on the holder's (debtor's) securities, the CSU shall, together with the lien, enter and record into the Central Securities Registry the Participant nominated by the execution Court Judge to sell the securities in question. Such securities may be sold or dealt with strictly and exclusively, in accordance with the instruction of the Participant nominated by the execution Judge.

      • Article 55 Amendment of Regulations

        The BSE may, from time-to-time amend these Rules and shall promptly notify all the Participants of any proposal it has made to change, revise, add or repeal any Rule or text, or alter any description of the proposed Rule and its purpose and effect. The Participants may submit to the BSE their comments for its consideration with respect to any such proposal, and such comments shall be filed with the BSE's records.

      • Article 56 Procedures

        56.1 The BSE shall, pursuant to these Rules, prescribe from time-to-time procedures and other regulations in respect of the business and functions of the CSU's operations. Each Participant shall be bound by such procedures and regulations and any amendment thereto, in the same manner as it is bound by the provisions of these Rules. Participants shall be given prompt notice of any proposed amendment to the procedures. Upon adequate notification to the Participants, the BSE may, at its own discretion, alter the procedures with respect to any particular transaction.
        56.2 In connection with any transaction handled through the Central Securities Registry under these Rules, the BSE may at any time change such forms, lists, instructions, notices, or any other documents used.

      • Article 57 CSDR Membership Agreement

        The provisions and conditions of the CSDR Membership Agreement with the Participant, referred to in sub-Article (21.3) hereof, shall be considered as part and parcel of these Rules.

    • Resolution No. (11) for 1999 in Respect of the Transfer of Shares Ownership Application Signed Outside the Bahrain Stock Exchange's Premises

      The Chairman of the Board of Directors:

      After perusal of Decree Law No. (4) of 1987, pertaining to the establishment and organization of the Bahrain Stock Exchange;

      And the Minister of Commerce & Agriculture's Resolution No. (13) of 1988, concerning the issuance of the Bahrain Stock Exchange's Internal Regulation;

      And the Minister of Commerce & Agriculture's Resolution No. (8) of 1993, amending certain provisions of the Bahrain Stock Exchange's Internal Regulation;

      And the Minister of Commerce & Agriculture and Chairman of the Bahrain Stock Exchange's Board of Directors' Resolution No. (2) of 1990, amending Article (54) of the Bahrain Stock Exchange's Internal Regulation;

      And upon the submission of the Director of the Bahrain Stock Exchange;

      And upon the proposal of the Bahrain Stock Exchange's Board of Directors;

      RESOLVED AS FOLLOWS:

      • Article One

        In cases of transactions exempted from trading on the Exchange's Trading Floor, the owner of shares who is unable to attend the Exchange's premises for reasons of old age, sickness, or any other reasonable cause, may sign the transfer of ownership application and the undertaking in accordance with the attached form, provided that the value of shares to be transferred does not exceed BD300.000.

      • Article Two

        In cases where the value of the shares to be transferred exceeds the amount stipulated in the aforesaid Article, the transfer of securities form shall be signed in the presence of a Bahrain Stock Exchange representative, who shall endorse the application and the standard form. The Exchange representative's transportation cost amounts to BD5.000 shall be paid in advance, in addition to the Exchange's commission.

      • Article Three

        The Exchange's staff in charge shall assess the cases of disability, sickness and any other reasons preventing the presence of the concerned person at the Exchange's premises. He shall give the transfer application form and a copy of the attached standard form if any of the above reasons have been satisfied. The designated staff shall have the right to decline any request for transfer if he believes that this would be in the public interest, and will maintain in his opinion the accuracy, soundness and efficiency of transactions and will avail the protection for the clients.

      • Article Four

        The provisions of this Resolution shall be applicable to all transactions exempted from being traded on the Exchange's Trading Floor premises, provided for in Article No. (36) of the Internal Regulation issued by the Minister of Commerce & Agriculture's Resolution No.(13) of 1988, and which has been substituted by Resolution No. (8) of 1993, provided that the owner of the shares who wishes to transfer ownership of his shares is resident in Bahrain.

      • Article Five

        The Director of the Bahrain Stock Exchange shall implement this Resolution from the date of its publication in the Official Gazette.

        Minister of Commerce
        and Chairman of the Board of Directors
        of the Bahrain Stock Exchange

        Issued on 20 Ramadhan 1420 H
        Corresponding to 28th December 1999

        ACKNOWLEGEMENT

        I the undersigned........................................./................................. national. Holder of passport No.........................,acknowledge that I have assigned my below-detailed shares to....................................................... .

        And I have no objection to register the same in his name with all their rights, as transactions exempted from trading in the Trading Floor. I also discharge The Bahrain Stock Exchange from any legal responsibility or claim that may emerge as a result of transferring the ownership of these shares.

        SHARES' PARTICULARS:

        Certificate Number Name of the Company Shares' No.
        1-...................... ........................... ................
        2-...................... ........................... .................
        3-...................... ........................... .................
        4-...................... ............................ ................

        Signature:..............................

        CPR. No.:..............................

        Date:....................................

        First Witness

        Name:.....................................

        CPR No.:.................................

        Date:.....................................

        Second Witness

        Name:...................................

        CPR No.................................

        Date:......................................

        ACKNOWLEDGEMENT AND UNDERTAKING OF TRANSFEREE:

        I the undersigned................................/ national of..................

        Holder of passport No................../CPR No....................., acknowledge that the above mentioned person had signed this acknowledgement in front of me, and I undertake to bear all legal responsibilities resulting from the transfer of these shares to me. And I also undertake to repay the value of the transferred shares if such value is claimed.

        Signature:............................

        Name:.................................

        CPR No.:..............................

        Date:...................................

    • Resolution No. (1) 1998 in Respect of Disclosing Certain Private Information about the Trading of Listed Securities on the Bahrain Stock Exchange

      The Minister of Commerce and Chairman of the Exchange's Board of Directors:

      After perusal of Decree Law No. (23) of 1973 establishing the Bahrain Monetary Agency and its Amending Laws;

      And Decree Law No. (28) of 1975 regarding the Commercial Companies Law and its Amending Laws;

      And Decree Law No. (4) of 1987 pertaining to the establishment and organization of the Bahrain Stock Exchange;

      And the Minister of Commerce and Agriculture's Resolution No. (13) of 1988, pertaining to the Internal Regulations of the Bahrain Stock Exchange;

      And upon the submission of the Director of the Bahrain Stock Exchange;

      And after the consent of the Exchange's Board of Directors.

      RESOLVED AS FOLLOWS:

      • Article One

        In the application of the provisions of this Resolution, a legal person means any company or institution whose financial transactions come under the control of the Bahrain Stock Exchange, regardless of whether they are a public or private company or institution.

      • Article Two

        Any individual or legal entity shall inform the Exchange immediately in writing when his ownership, or his ownership in addition to his minor sons' ownership, or accounts under his control, reaches 5% or more of the issued and paid-up capital of a listed joint stock company.

      • Article Three

        Any individual or legal entity shall inform the Exchange immediately if his ownership, or his ownership in addition to his minor sons' ownership, or any accounts which come under his control, or the ownership of any of his associates or subsidiaries, reaches 10% or more of any listed securities of a joint stock company. The Exchange shall have the right to publish the name of the person who owns the said percentage.

        Any person or persons referred to in the preceding paragraph, who wish to execute a transaction for himself, or for accounts under his control in a number of securities representing 1% or more of the said issue, shall inform the Exchange in writing, prior to the conclusion of the transaction's contract. Non-compliance with this procedure shall result in the cancellation of the transaction.

      • Article Four

        Any individual or legal entity whose ownership of any listed securities reaches 10% or more and wishes to purchase or own 20% of a company's shares, shall inform the Director of the Exchange in writing, prior to the submission of his purchase order on the Trading Floor. The Exchange's Board of Directors shall have the right to reject the transaction, if such a transaction, in the Board's opinion, is not in the interest of the national economy.

        In the case of purchasing shares of a financial institution which comes under the control of the Bahrain Monetary Agency, the Bahrain Monetary Agency's approval shall be obtained before purchasing or owning 20% or more of the said financial institution's shares.

      • Article Five

        Listed companies and brokerage offices established under Resolution No. (2) of 1995 pertaining to the services offered by brokerage firms on the Bahrain Stock Exchange, and registration and transfer offices, shall be responsible for immediately submitting to the Exchange, a written report of each trading transaction amounting to 5% or more of any listed security owned by any individual or legal entity, and provide the Exchange with such statements and documents for the purpose of ascertaining the correctness of the statements provided for in the reports.

      • Article Six

        Brokerage companies established under Resolution No. (2) of 1995 referred to in the above Article, shall prepare weekly reports including statements regarding the nationalities of clients for whom they deal with their accounts and Mutual Funds portfolios managed by them, and shall also inform the transfer offices therewith.

        The transfer offices shall inform the Exchange weekly of the nationalities whose ownership approaches the limits authorized by the Commercial Companies Law and its Amendments, and the Articles of Association of the said companies.

      • Article Seven

        The Director of the Bahrain Stock Exchange shall implement this Resolution, which shall come into effect from the date of its publication in the Official Gazette.

        Minister of Commerce
        Chairman
        Board of Directors of the Bahrain Stock Exchange

        Issued on 19 Shaaban 1419H
        Corresponding to 8 December 1998

        Official Gazette No. 2350, Wednesday, 9th December 1998, Page No. 12

    • Resolution No. (12) of 1991 in Respect of Procedural Controls Pertaining to The Transfer of Shares Ownership by Individuals from outside The State of Bahrain

      The Director of the Exchange:

      After perusal of Amiri Decree No. (4) of 1987, pertaining to the establishment and organization of the Bahrain Stock Exchange;

      And Resolution No. (13) of 1988, in respect of the issuance of the Bahrain Stock Exchange's Internal Regulations and its Amendments;

      And the Exchange's Board of Directors Resolution No. (1) of 1990, concerning cases exempted from trading;

      And upon the Bahrain Stock Exchange's Board of Directors Resolution No. (2) of 1990, concerning some controls of trading in securities;

      RESOLVED AS FOLLOWS:

      • Article One

        The Exchange's Operations Department may transfer the ownership of shares owned by shareholders outside Bahrain, subject to a Power of Attorney authenticated by one of the following authorities:

        1. Notarization and justice offices.
        2. Chambers of Commerce in the transferee's country.
        3. Commercial banks in the transferee's country.
        4. Registration or transfer offices of the companies whose shares are to be transferred.
        5. Any other official authority approved by the Exchange.

        The person who authenticated the transferee's signature shall be legally liable for the genuineness of his signature.

      • Article Two

        This Resolution shall be disseminated to all of the Exchange's concerned departments, and shall come into effect from the date of its issuance.

        The Director of the Bahrain Stock Exchange

        Issued on 22 Safar 1411 H
        Corresponding to 1st September 1991

  • BHB Clearing, Settlement and Central Depository Procedures

    1- Resolution No. 20/2001 with respect to the Clearing, Settlement and Central Depository Procedures.
    2- Attachments:
    a- Depository charges.
    b- Standards agreement for the provision of trading, settlement Clearing and Central depository services.

    • Resolution No. (20) of 2001 with Respect to the Clearing, Settlement and Central Depository Procedures

      The Director of the Exchange:

      After perusal of Amiri Decree No. (4) of 1987 pertaining to the establishment and organization of the Bahrain Stock Exchange;
      And the Internal Regulations of the Bahrain Stock Exchange, issued by the Minister of Commerce and Agriculture's Resolution No. (13) of 1988, as amended;
      And the Chairman of the Bahrain Stock Exchange's Resolution No. (4) of 1999 concerning the Automated Trading Rules and Procedures;
      And the Chairman of the Bahrain Stock Exchange's Resolution No. (3) of 2000 pertaining to the Clearing, Settlement, Depository and Registry Rules;

      Have Resolved As Follows:

      • Article (1)

        These procedures shall be implemented temporarily during the testing period of the Clearing, Settlement and Central Depository System at the Bahrain Stock Exchange, and shall be developed during the testing period and finally issued after ascertaining its compatibility with the System.

      • Article (2)

        The Departments, Divisions and Units of the Exchange and participating members shall implement these procedures, which shall come into effect from the date of its issuance.

        Ali Salman Thamer
        In Charge of Director's Affairs
        Bahrain Stock Exchange

        Issued on 15th Shawal 1422H
        Corresponding to 30th December 2001

      • Chapter 1

        • Article 1 Definitions

          Unless the context requires otherwise, the following words and expressions shall have the meaning attributed to them:

          The Law: means the Bahrain Stock Exchange Law issued in accordance with Decree Law No. 4/1987.
          Business Days: means days of the week from Sunday to Thursday, excluding public holidays.
          The Exchange: means the Bahrain Stock Exchange.
          The Director: means the Director of the Bahrain Stock Exchange.
          The Board: means the Board of Directors of the Bahrain Stock Exchange.
          Settlement Bank: means the bank which provides the Exchange and its participants with the necessary facilities to effect payments relating to the settlement of securities transactions executed at the Exchange.
          Settlement Account: means the account maintained by the participants and the Exchange at the Settlement Bank, for the settlement of the net balance due to or from the broker.
          Participants: means the broker or any party who is permitted by the Exchange to provide clearing, settlement, and central depository services.
          Investor's Number: means the number allocated by the Exchange to any dealer in securities.
          Unique Identification Number: shall mean the Central Population Registry's Unique Identification Number for a Bahraini legal entity or individual person and an identification number allocated by the BSE on the basis of a passport, extract of the home country company register, or any other official document showing the identity of non-Bahraini legal entities or individual persons.
          Settlement Day: means the designated day for the settlement of deals performed at the Exchange. Presently it is two days after the transaction day (T+2).
          The Unit: means the designated unit for the procurement of clearing, settlement and central depository at the Exchange.
          Securities: means shares and debentures issued by Bahraini joint stock companies, bonds and promissory notes issued by the Government of Bahrain, or by any Bahraini public corporation or institution, or any other instruments or securities, Bahraini or otherwise, approved for trading by the Board.
          Registrar: means the designated party for the maintenance and management of the share register in public joint stock companies, or any other register for the ownership of other types of securities.
          Share Register: means the special register for recording shareholders names, nationalities, addresses and number of shares held by the shareholders and any transactions performed on these shares.
          Custodian: means the participant authorized to perform custodial and transfer services of securities and payment of obligations resulting from the trading of such securities on behalf of the custodian's clients.
          Central Registry: means the central database where all information relating to holders of securities, mortgages and third parties rights on deposited securities are recorded.
          Guarantee Fund: means the contributory Guarantee Fund established by the Exchange for payment of obligations resulting from failure of a participating broker in the payment of his net debt balance on the Settlement Day.
          Deposited Securities: means any securities that are, from time-to time, entered in the securities account of a participating broker or in the account of an investor through the Clearing, Settlement and Central Depository System by deposit or delivery.

      • Chapter 2

        • Article 2 Clearing, Settlement and Central Depository Services

          Clearing, Settlement and Central Depository Services include the management, custody and deposit of all securities listed on the Exchange through the Clearing Settlement and Central Depository System, and the connection of the brokers, other participating members and the registrars of securities relating to the listed entities, and the approved securities custodians in the Clearing, Settlement and Central Depository System at the Exchange.

        • Article 3 Functions of the Unit

          The Unit shall perform the following functions:

          1. Organization of the database.
          2. Issuance of Investors' Numbers.
          3. Operation and management of the Clearing, Settlement and Central Depository System.
          4. Updating of particulars in the securities accounts based on the transactions carried out at the Exchange, including deposit, sale, purchase, transfer and withdrawal of deposited securities.
          5. Opening and maintaining securities accounts in the securities central registry, production of securities holders' balances, transfers, mortgages and other third party interests.
          6. Deposit of securities by participating members.
          7. Settlement of securities:
          (a) Transfer of deposited securities ownership as a result of the deals performed at the Exchange, or as an exempted transaction.
          (b) Calculation of amounts due for payment, collection to/from brokers for all deals performed at the Exchange and ensuring their settlement through the Settlement Bank.
          (c) Payment of amounts due to brokers whenever net amounts are due from the Guarantee Contribution Fund.
          (d) Receipt of amounts due from brokers whenever net amounts are due from them to the Guarantee Fund.
          8. Any other functions relating to the clearing, settlement, depository, registration and custody of securities at the Exchange.

        • Article 4 Services Provided to Investors

          The Unit provides the following services:

          1. Organization, issuance and maintenance of the Investor's Number (IN).
          2. Custody of the investor's deposited securities.
          3. Transfer of the ownership of securities electronically from the selling investor's account to the buying investor's account.
          4. Issuance of the letter evidencing ownership of deposited securities, subject to the investor's or any official entities' request.
          5. Issuance of statements of investor's accounts on a regular basis, or as requested by the investor and send such statements to the address recorded in the investor's database.
          6. Approve authorizations to deal in deposited securities.
          7. Amend and update the investor's database in the Clearing, Settlement and Central Depository System at the request of the investor, or whenever required.
          8. Transfer the investor's securities upon his request from the investor's clearing account to the investor's account with the broker.
          9. Transfer the investor's deposited securities upon his request, from his account with one broker to his account with another broker.
          10. Transfer the ownership of the investor's deposited securities to any other person as an exempted transaction.
          11. Freezing or lifting the freeze on deposited securities at the request of the investor, or any competent authority.
          12. Strengthen the relationship between the investor and issuers of securities.

        • Article 5 Service Fees

          1. The Unit shall be responsible for the collection of fees for the Clearing, Settlement and Central Depository Services which are provided by the Exchange, in accordance with Schedule (1) attached to these procedures.
          2. The fees schedule shall constitute an integral part of these procedures and shall be circulated to all brokers, other participating members, investors, depositors and those concerned with the services provided by the Unit.

      • Chapter 3 Share Register

        • Article 6 Maintenance of the Share Register

          1. The Exchange may maintain a share register of joint stock companies and issuers of securities at their request.
          2. The depositing investor in whose securities account a security is entered, is deemed to be the legal owner of such security and the statements issued by the Central Depository are deemed to be legal documents to establish the ownership of the security.
          3. A letter shall be issued to establish ownership of deposited securities if the investor wishes to mortgage such securities for obtaining any credit facilities, or as security for any other purpose.
          4. Ownership of the deposited securities in clearing records shall be transferred electronically and listed companies or any other party may not make any changes pertaining to such securities in the share register maintained by the companies.

        • Article 7 Central Registry

          1. The Central Securities Registry constitutes a central database where all information pertaining to the deposited securities holders is recorded.
          2. The Central Securities Registry contains all particulars associated with the ownership of the deposited securities, in addition to the establishment of third parties rights, such as mortgages and attachments.
          3. The transfer of deposited securities and the establishment of third party rights in the Central Registry for securities are deemed to be legally binding to the relevant parties.

        • Article 8 Particulars of the Central Registry

          The particulars of the securities in the database shall include the following:

          1. Name of the Registration Office and issuer of the securities.
          2. Type and category of securities.
          3. Date of issue of the securities.
          4. Maturity date of securities (if any).
          5. Nominal value of securities.
          6. Total value of the issue.
          7. Interest rate (if any).
          8. Name of guardian (if any).
          9. Total number of securities issued.
          10. Names of investors, their addresses, identification numbers and contact numbers.
          11. Number of securities held by each investor.
          12. Any other details or particulars pertaining to the securities, as requested by the Exchange at its own discretion.

        • Article 9 Investors' Accounts

          1. Investors numbers shall be obtained upon the completion of the Investors Information Form No. (1), provided that each investor shall have no more than one investor's number. Not more than one investor's number shall be issued to any individual investor or entity.
          2. The Unit shall open special accounts for depositors of securities, whether they are individuals, companies or public or private institutions, Bahraini or non-Bahraini. Every account shall have a number, automatically determined by the Clearing, Settlement and Central Depository System. Account numbers shall be obtained upon completion of the Investor's Opening Account Form No. 2.
          3. All members and their clients are required to open securities accounts with the Clearing, Settlement and Central Depository System before they are permitted to conduct any sale or purchase transaction of securities.
          4. The Unit shall open securities accounts for members (internal account) with the Central Securities Registry and shall enable the members to open such accounts on behalf of their clients with the Central Securities Registry (Client Accounts) through which they shall perform procedures and transactions, which are executed in the Central Securities Registry on behalf of the securities holders on these accounts.
          5. The member and his clients must enter in the securities accounts all procedures and transactions which are carried out on securities held by them, in a manner that such accounts shall reflect the transactions and balances of the securities and mortgages performed on the securities, and any third party rights in the relevant securities.

      • Chapter 4 Securities

        • Article 10 Deposit of Securities

          1. The securities shall be deposited with the Central Depository by the special Deposit Form No. (3), accompanied by original certificates of the securities to be deposited.
          2. The securities certificates, delivered to the Central Depository, shall be deposited and entered in the securities account determined by the depositor.
          3. The Registrar of securities submitted for deposit shall confirm the validity of such securities by fixing the Registrar's stamp on the securities certificates.
          4. All deposits of securities shall be accompanied by Deposit Form No. (3), provided that such certificates shall be valid and genuine and the member shall guarantee the validity of all securities delivered to the Central Depository for deposit. Preliminary receipt of securities by the Unit and the entry thereof in the account balance, shall be designated by the depositor, and not be considered as a waiver by the Unit of the guarantee of the member to the validity of the deposited securities.
          5. All formalities relating to the deposit of securities, which are delivered to the Central Depository, should be completed within 24 hours from the date of delivery thereof, and all deposit transactions should be reviewed by the Unit, to verify their number and transferability.
          6. Securities delivered for deposit shall be added to the actual balance of the investor's account, unless the following is revealed upon the review of the securities:
          (a) Any difference between the securities delivered and the particulars entered in the attached deposit form.
          (b) Any omission or amendment in the number of securities or the issuer in the deposit form.
          (c) The securities are not valid or genuine, or destroyed.
          (d) Any other reason determined by the Exchange.
          7. The Unit shall be entitled, upon the occurrence of any of the above events, to refuse receipt or delivery of the securities and the rejection decision shall be entered in the Clearing, Settlement and Central Depository System.

        • Article 11 Settlement of Securities

          1. Sold securities shall be deducted from the seller's account, immediately upon execution of the transaction.
          2. The purchaser's securities shall be added to the purchaser's account immediately upon execution of the transaction, and such securities may be resold in the same trading session, upon the addition thereof to the purchaser's account.
          3. Ownership of the purchased securities shall be transferred upon the execution of the transaction and completion of settlement formalities.

        • Article 12 Securities Account Balance

          1. The Unit shall issue semi-annual account statements of the securities depositors accounts and send such statements to their addresses, as stated in the Investor's Information Form No. (1). Depositors shall be entitled to request statements of their accounts, which show the balance of such accounts and any transactions or transfers performed thereof. Such statements shall be requested through an Account Statement Request Form No. (4), issued to one or more issuers.

          The Account Statement Request Form shall be completed and submitted to the Unit during the Exchange's working hours. The Unit shall issue the required account statement within 24 hours from the date of receipt of the request.

        • Article 13 Withdrawal and Freezing of Securities

          1. Deposited securities shall only be withdrawn by the members in their own capacity or on behalf of their clients, upon payment of the service charge stated in Appendix (1).
          2. Deposited securities shall be withdrawn from the Central Depository by deducting them from the securities balance upon completion and submission of the Securities Withdrawal Form No. (7) to the Unit.
          3. Deposited securities may be frozen and/or withdrawn in the following events:
          (a) Upon the request of the investor depositor.
          (b) Death of the investor depositor.
          (c) Mortgage and attachment.
          (d) If required by a competent authority.
          (e) For money laundering combat purposes.
          (f) For any reason as may be occasionally determined by the Exchange.

        • Article 14 Request for Evidencing Ownership of Deposited Securities

          1. The investing depositor may request the issuance of a letter to establish his ownership of the deposited securities through the completion and submission of the Establishment Ownership Request Form No. (10) to the Unit. This applies to companies whose share register is maintained by the Exchange.
          2. Upon approval to issue the letter establishing ownership to the investing depositor, the Unit shall perform the following:
          (a) Transfer the ownership of securities from the tranche allocated for the clearing in the Register to the pending tranche of the Register.
          (b) Issue the letter for the establishment of ownership of the deposited securities within a period of time, not exceeding 36 hours from the date of application.
          3. The Exchange may refuse to issue the letter for the establishment of ownership of deposited securities for any appropriate reason, or may postpone the issuance of such a letter.
          4. Securities for which an establishment of ownership letter has been issued should not be disposed of by sale or transfer.
          5. The listed entity should not issue any ownership certificate for securities kept under the clearance tranche in the electronic register.

        • Article 15 Access to the Shares Register in the Central Depository System

          1. Only authorized staff of the Exchange shall be permitted access to the share register in the Central Depository System to the extent of responsibility and authority delegated to them.
          2. Listed entities may only peruse records of securities pertaining to them on electronic screens; however, they should not make any changes to these records.
          3. Listed entities may obtain extracts from their shares register. Other related parties may request such extracts upon payment of the amount fixed by the Exchange in this respect.

      • Chapter 5 Mortgage and Transfer of Securities

        • Article 16 Mortgage of Securities

          The mortgage of securities in favour of the mortgagor shall be effected in accordance with the following procedures:

          1. The mortgagee shall deliver a formal letter to the Exchange with a copy to the issuer of the securities, which states the following:
          (a) Name of the owner — mortgagor.
          (b) Name of the issuer and number of mortgaged securities.
          (c) Mortgage term.
          (d) Date of commencement of the mortgage.
          2. The following documents shall be attached to the letter:
          (a) The original shares certificate (if not previously delivered).
          (b) True copy of the mortgage contract signed by the mortgagor and mortgagee.
          3. Payment of the mortgage entry charge, in accordance with Appendix (1).
          4. The Exchange shall open a special register for the mortgaged securities, so as not to allow the mortgagor to dispose thereof, without the consent of the mortgagee.
          5. If the securities are registered in the electronic clearing system, the Exchange shall send a letter to confirm the mortgage to the mortgagee within 48 hours from the date of receipt of the mortgage letter. However, where the deposited securities are not registered in the electronic clearing system, the mortgage shall be confirmed by withdrawal of the deposited securities and notifying the relevant registrar in writing.
          6. Where the mortgagor and mortgagee agree to dispose of the mortgaged securities by sale at the Exchange, the mortgagee shall send a formal letter to the Exchange using the Release of Mortgage Form No. (9) to convey the wish of the two parties to transfer the mortgaged securities to the investor's account with the relevant broker. The Exchange shall transfer such securities to the investor's account with the relevant broker within 48 hours from the date of receipt of the application.
          7. The mortgagee shall issue a sale order to the agreed broker who shall sell the securities and transfer the proceeds to the agreed account within a maximum of 4 days from the date of the transaction.
          8. The Exchange shall instruct the broker in writing to transfer the proceeds of the sale of the securities to the account determined by the two parties.
          9. In the event of issue or distribution of rights or benefit pertaining to the mortgaged securities, such right shall be treated according to the agreement of the parties, as stated in the mortgage contract and the Mortgage Entry Application Form No. (8).
          10. In the event of release of the mortgage, the mortgagee shall notify the Exchange in writing with a copy of the Registrar of securities, with respect to the companies who maintain their registers.

        • Article 17 Transfer of Securities As Exempted Transactions

          1. The Unit may transfer ownership of securities as exempted transactions, in accordance with the provisions of Article (36) of the Internal Regulations as amended.
          2. The Unit shall, upon receipt of all the required transfer documents and fees from the transferee, perform the following:
          (a) Verify the validity of the transfer as exempted transactions referred to in Article 17 (1) above.
          (b) Allocate numbers in the system to the transferor and the transferee at their request, unless one of them or both have a number in the system.
          (c) Carry out the transfer of ownership of the securities.

        • Article 18 Transfer of Securities From the Investor's Account With One Broker to his Account With Another Broker

          1. The depositing investor may request the transfer of his balance of securities or any part thereof with one broker to his account with another broker, by completing and delivering to the Unit the Transfer of Securities Form No. (5).
          2. The owner shall, before requesting the transfer, perform the following:
          (a) Open an account with the other broker if he has no such account.
          (b) Complete the Transfer of Securities Form No. (5) and submit the same to the Unit.
          3. The broker (from whose account the transfer is made) shall make the owner complete the form and deliver the same to the Unit.
          4. The Unit shall, upon approval of the application, transfer the balance of the securities intended to be transferred to the investor's account with the transferee-broker.
          5. The Unit may reject the transfer or entry of information application in the following circumstances:
          (a) If after verification of the transfer request, it was discovered that there are discrepancies between the transfer order and the information entered with respect thereof into the Clearing, Settlement and Central Depository System.
          (b) Insufficient balance in the relevant securities account.
          (c) The existence of restrictions imposed by these procedures on dealing in the securities.
          6. The Unit is not obliged to verify the legal basis for the transfer, movement or restriction on the deposited securities, or compliance by the member with the terms of the contract, or by any other parties to the contract.
          7. The Unit may reject the transfer application from the investor's account with a broker to his account with another broker, if the investor has outstanding financial obligations towards the transferring broker, unless it was mutually agreed to settle such obligations.

        • Article 19 Transfer of Securities as a Result of Trading

          1. The Unit shall provide share register information to the issuers whose share registers are maintained by the Exchange on a regular basis, or as may be agreed upon between the Exchange and the issuers in the following events:
          (a) Convening of general meetings.
          (c) Distribution of dividends.
          (d) Restructuring of the issuer's capital.
          (e) Granting of any rights associated with the securities.
          (f) As requested by the issuer.
          2. The Unit shall provide information relating to the holder of deposited securities to the issuer or to the authorized registrar on a regular basis or as may be agreed between the Exchange and the issuer or registrar. Such information shall include the following:
          (a) Name, address and number of the investor who owns the deposited securities.
          (b) Number of securities held by the depositor at a certain time.
          3. Particulars pertaining to the ownership of securities shall be updated in the Central Register immediately upon conclusion of the deal. The Unit and the participating members shall update these particulars annually or as may be required, in accordance with the securities holder's instructions to the Unit or to the participating member, provided that such particulars shall include all information stated in the Investors' Information Entry Form No. (1).
          4. The Unit's staff shall undertake to maintain strict confidentiality of all particulars and information relating to resolutions issued by the issuers which may affect the prices of their deposited securities or resolutions relating to the sale or purchase thereof, and not to use such information or particulars to realize any direct or indirect personal benefits.

        • Article 20 Share Register

          1. The Unit shall provide share register information to the issuers whose share registers are maintained by the Exchange on a regular basis, or as may be agreed upon between the Exchange and the issuers in the following events:
          (a) Convening of general meetings.
          (c) Distribution of dividends.
          (d) Restructuring of the issuer's capital.
          (e) Granting of any rights associated with the securities.
          (f) As requested by the issuer.
          2. The Unit shall provide information relating to the holder of deposited securities to the issuer or to the authorized registrar on a regular basis or as may be agreed between the Exchange and the issuer or registrar. Such information shall include the following:
          (a) Name, address and number of the investor who owns the deposited securities.
          (b) Number of securities held by the depositor at a certain time.
          3. Particulars pertaining to the ownership of securities shall be updated in the Central Register immediately upon conclusion of the deal. The Unit and the participating members shall update these particulars annually or as may be required, in accordance with the securities holder's instructions to the Unit or to the participating member, provided that such particulars shall include all information stated in the Investors' Information Entry Form No. (1).
          4. The Unit's staff shall undertake to maintain strict confidentiality of all particulars and information relating to resolutions issued by the issuers which may affect the prices of their deposited securities or resolutions relating to the sale or purchase thereof, and not to use such information or particulars to realize any direct or indirect personal benefits.

        • Article 21 Access to Database

          1. No person may access the database in the Securities Central Register to obtain information about any person as a holder of one security or more, or to obtain information relating to transfers or restrictions pertaining to a particular person.
          2. Notwithstanding the provisions of Sub-Article (1) above, the securities holder or the Court may require any information about the securities balance in the investor's account or about any transfers or restriction pertaining to such account, in accordance with the procedures and charges prescribed by the Exchange.
          3. Notwithstanding the provisions of Article (2) above, the Court may require information relating to the securities balance in any person's account, or any transfers or restriction pertaining to the account where such information is required in accordance with legal proceedings involving the securities holder, including proceedings relating to money laundering.
          4. The Exchange and the Settlement Bank must maintain information relating to securities accounts of any participating member, the clearing account and the operating account, with utmost confidentiality.

      • Chapter 6

        • Article 22 Brokers' Access to the Central Depository System

          1. The broker may access the part accessible to him in the Central Depository System during the hours fixed by the Exchange to perform the following:
          (a) Open investors accounts for his clients.
          (b) Enquire about the movement and balances of the investors who deposit their securities through him.
          (c) To review any other information about his clients as may be authorized by the Unit.
          2. A broker should not disclose the secret number granted to him to access the Clearing System to any other person. Such broker shall bear all liabilities and consequences resulting from violation of this provision.
          3. The broker undertakes to maintain the confidentiality of the Central Depository System, refrain from abuse of the system, maintain his secret number, define the authority of his staff and remind them of the importance of the confidentiality of the system and related laws.

        • Article 23 Financial Settlements

          1. Settlement of transactions executed on the Exchange shall be carried out within the following two days trading (T+2).
          2. All transactions concluded at the Exchange through the electronic trading system shall be transferred automatically to the Clearing system, to complete the clearing operations and payment of the purchased securities value through the Settlement Bank within the two days following the trading (T+2), and transfer the ownership of the securities simultaneously with payment of net cash balances.
          3. The net to pay or receive amounts to the broker shall be calculated within half an hour after the trading session, and the report shall be sent to the Settlement Bank on the same day of trading.
          4. The broker shall pay the net to pay amount due from him according to the 'net to pay amount statement' issued by the Clearing system not later than 09:30 a.m. on settlement day (T+2).
          5. The Settlement Bank shall, upon the instructions of the Unit, pay the amount stated in the 'net to pay amount statement' in the relevant broker's account not later than 10:00 a.m. on settlement day (T+2).
          6. The Settlement Bank shall send to the Unit on (T+2) a report to confirm completion of settlement and clearing of the transactions which should be settled by the brokers before the commencement of the trading session.

        • Article 24 Debentures Settlement

          1. Unless otherwise provided in the debentures prospectus, debentures shall be settled in the Exchange with regard to their maturity and settlement terms, in the manner applicable to other securities.
          2. The settlement amount shall include the value of the transaction and accumulated interest up to the settlement date (T+2), in accordance with ISMA Regulations.
          3. Accumulated interest shall be calculated up to the settlement date, in accordance with the mechanism and procedures issued by ISMA.
          4. Commission on trading of debentures shall be calculated on the basis of the value of the traded debentures only. Accumulated interest shall not be taken into consideration in calculation of the commission.
          5. Accumulated interest shall be calculated on the basis of the nominal value of the debenture, and interest shall accumulate as of the date of the last payment of interest amount until the date of the transaction.

        • Article 25 Receipt of Amounts due from Brokers

          1. The brokers shall deposit amounts due from them in the Settlement Bank not later than 09:30 a.m. on the settlement day (T+2).
          2. Amounts due from brokers deposited in the accounts with the Settlement Bank on the settlement day (T+2) shall correspond with the amounts stated in the net receivable amount statement issued by the Clearing system.
          3. The broker shall pay amounts due from him by transferring the funds to the BSE's clearing account with the Settlement Bank.

        • Article 26 Payment of Amounts due to Brokers

          4. The Exchange shall pay the amounts due to brokers through the Settlement Bank not later than 10:00 a.m. on the settlement day (T+2).
          5. Amounts payable to the brokers (creditors) should correspond exactly to the amounts stated in the net payable amounts statement issued by the Clearing System.
          6. The Settlement Bank shall, upon the instructions of the Exchange, pay the amounts payable to the brokers (creditors) by transfer of the funds from the clearing account of the Exchange to the relevant brokers account(s) with the Settlement Bank.

        • Article 27 Participants Contribution to the Guarantee Fund

          1. The broker must, upon admission to the membership of the Clearing, Settlement and Central Depository System, pay the prescribed minimum contribution in the joint Guarantee Contribution Fund account with the Settlement Bank.
          2. Amounts relating to the brokers' contribution in the Guarantee Fund should be kept separately from the Exchange assets.
          3. Every broker must contribute to the Guarantee Fund a fixed amount of money, which is currently as follows, through the term of his membership with the Clearing, Settlement and Central Depository System:
          (a) A minimum of BD50,000 (Fifty Thousand Bahraini Dinars) for participating brokers in category (A), established in accordance with the provisions of Article 16 (Secondly) of the Exchange's Internal Regulations and the Chairman of the Exchange's Resolution No. 2/95.
          (b) A minimum amount of BD25,000 (Twenty Five Thousand Bahraini Dinars) for participating brokers other than category (A), established in accordance with the provision of Article 16 (Firstly) of the Exchange's Internal Regulations.

        • Article 28 Utilisation of the Guarantee Fund Amount

          1. If any participating broker fails to pay the net balance amount due from him to the Exchange at 09:30 a.m. on settlement day (T+2), the shortfall shall be deducted from the Guarantee Fund account and shall be paid to the Exchange's clearing account.
          2. If the unsatisfied obligations in connection with the net payable balance amount exceed the broker's contribution, the shortfall shall be proportionately distributed amongst other contributors to the Fund, based on the proportion of their respective contributions and the said amount shall be deposited in the Unit's clearing account.
          3. The participating broker who fails to pay the net payable balance amount due from him, shall be liable to the Exchange to repay the amount charged to the Guarantee Fund account and all costs associated with the use of the Guarantee Fund as may be determined by the Exchange.
          4. If the participating broker fails to pay the net payable balance amount due from him by 09:30 a.m. on the settlement day, the Exchange may suspend the provision of the following services to the defaulting broker, and the suspension of such services shall continue until payment of the amount mentioned in paragraph (2) above.
          (a) All services relating to trading of securities in general.
          (b) All services and activities relating to Clearing, Settlement and Central Depository operations. Services relating to the broker's obligations pending settlement shall be excepted.

        • Article 29 Disposal of Securities Purchased for the Broker

          1. To guarantee payment of the net balance due from the broker, the Exchange shall be entitled to dispose of all securities purchased by the broker and such right of disposal shall be retained by the Exchange until such time when all obligations of the broker are satisfied.
          2. If the broker fails to pay the amount charged against him in the Guarantee Fund account and all other costs associated with the Fund's balance, the Exchange may authorize any other broker to sell all or any part of the securities mentioned in paragraph (1) above and the sale shall be carried out for the account of the Exchange, without notifying the relevant participating broker with the sale transaction. The proceeds of sale shall (after deduction of commission, costs, fees and expenses) be paid to the Guarantee Fund account.

        • Article 30 Participating Broker's Rights in the Event of Default by the Client

          To guarantee payment of amounts due to the participating broker from his clients for providing brokerage services in connection with the clients' securities, the broker may object to the transfer of purchased securities from the clients account with the broker to his account with another broker. The broker shall be entitled on the third day after trading (T+3) to request the resale of the relevant securities to recover amounts due to him, provided that the resale shall be effected subject to the Exchange's approval and through a different broker, in accordance with the procedures laid down by Resolution No. 3/2000 on Clearance, Settlement and Central Depository Rules at the Exchange.

        • Article 31 Replenishment of the Guarantee Fund Amount by the Defaulting Participating Broker

          1. The defaulting broker who fails to pay the net payable balance amount due from him by 09:30 a.m. on settlement day (T+2), and causes the Exchange to satisfy his obligations to other brokers participating in the Guarantee Fund account, shall undertake to replenish the Guarantee Fund account with the amount drawn from the Fund by the Exchange to cover his debit balance.
          2. If it becomes evident to the Exchange by 09:45 a.m. on T+3 that the broker has failed to repay the amount drawn from the Guarantee Fund account to settle the broker's debit balance, the Exchange may instruct the defaulting broker to sell the purchased securities in absolute secrecy by another broker.
          3. If the defaulting purchaser's broker fails to sell the purchased securities through the authorized broker on T+3, the Exchange may allow the defaulting broker one additional day to sell the relevant securities on T+4.
          4. If the defaulting broker fails to sell the purchased securities on T+4, the Exchange may instruct the Trading and Members Affairs Units to sell the relevant securities by public auction on T+5.
          5. If it becomes evident to the Unit by 09:30 a.m. on T+6 that the proceeds of the sale of the securities according to this Article are insufficient to cover the amount required to supplement the Guarantee Fund account, the Unit shall require the defaulting broker to pay the balance, provided that any surplus amount (if any) shall be paid to the relevant investor after deduction of all expenses and fines payable by the defaulting broker.

        • Article 32 Replenishment of the Guarantee Fund Amount by Other Brokers

          1. If it becomes evident to the Unit by 09:00 a.m. on T+7 that the defaulting broker has failed to pay the balance referred to in Article (31-5) of this Resolution and that the Guarantee Fund balance is insufficient, the Exchange shall immediately require all participating brokers to inject funds into the Guarantee Fund account, in addition to notifying the Settlement Bank to enter all amounts received into the Guarantee Fund account.
          2. The Unit shall determine the amount required to be transferred by each broker according to paragraph (1) above to the Guarantee Fund account, in accordance with the following formula:

          Total net value (balance)
          _________________________________________
          Number of brokers - Number of defaulting brokers
          3. The Unit shall, immediately upon calculation of the amounts to be transferred to the Guarantee Fund account, send a written notification to all participating brokers fixing the amount payable by each broker and the method used in the calculation of the amount. The participating brokers shall issue instructions to the Settlement Bank to deposit the said amounts in the Guarantee Fund account, no later than the day following the said notification date.

        • Article 33 Suspension of Services Provided by the Exchange To Defaulting Participating Brokers

          1. If any participating broker fails to pay the net payable balance amount due from him by 09:30 a.m. on the settlement day (T+2), the Exchange may, according to Article (13) of the Resolution No. 4/2000 on the Establishment of the Guarantee Fund, suspend the following services to the defaulting broker pending payment of the amount due:
          (a) Any service relating to trading of securities provided by the Exchange in general.
          (b) All services and activities relating to clearing and settlement, with the exception of services associated with any pending settlement obligations by the defaulting broker.
          2. If the defaulting broker settles the net payable balance amount due from him, the Exchange may resume provision of services referred to in paragraph (1) above to the defaulting broker and the other relevant parties shall be immediately notified thereof.
          3. The Exchange may, at its own discretion, apply the provisions of Article (26) of Resolution No. 3/2000 on the Clearing, Settlement, Registry and Central Depository Rules to the participating broker who defaults in the payment of the net payable balance amount due from him for more than twice in one year.

        • Article 34 Disposal of Securities Purchased for the Account of the Participating Broker

          1. To secure payment of the net payable balance amount due from the defaulting broker, the Exchange may dispose of all or part of securities purchased by the defaulting broker, provided that the right of disposal shall be retained by the Exchange until such time when the defaulting broker shall pay his obligations for the settlement of the relevant transaction.
          2. The proceeds of resale of purchased securities shall be transferred to the Exchange's operating account and the Unit shall, upon receipt of such amount, issue instructions to the Settlement Bank to deduct the amount pertaining to the proceeds of sale of the purchased securities from the Exchange's operating account and credit the amount, after deduction of any commission, cost or expense due to the Exchange and the Settlement Bank.

        • Article 35 Suspension of the Exchange's Services to the Defaulting Participating Broker

          1. The Exchange may suspend trading, clearing and settlement services provided by the Exchange to the participating broker in the following circumstances:
          (a) If the broker fails by 09:30 a.m. on the settlement day (T+2) to pay his debit balance in the Exchange account with the Settlement Bank.
          (b) If the broker fails to pay his initial contribution or any additional contribution in the Guarantee Fund's account within 5 days from the date of receipt of the payment memorandum issued by the Unit.
          (c) If the broker fails to transfer the amount due from him to replenish the Guarantee Fund account, in accordance with Article (31) of these Procedures.
          2. Where the Exchange terminates the services provided by it to the broker, in accordance with Article (1) above, the Unit shall return to the broker his contribution in the Guarantee Fund and any accruing interest on such amount, within 15 days from the date of termination of services provided by the Exchange to the broker, provided that the broker shall pay all his obligations to the Exchange and the Settlement Bank.

        • Article 36 Suspension of Trading, Clearing and Settlement Services From All Participating Brokers

          1. If it becomes evident to the Exchange that the total balance of the Guarantee Contribution Fund has been reduced to less than 50% of its original balance, due to the arrears in the net debit balances of one or more brokers, or due to default in the transfer of funds to the Guarantee Contribution Fund, the Exchange may temporarily suspend the trading, clearing and settlement services from all brokers.
          2. The Exchange may, in accordance with the provisions of Article (1) above, require all participating brokers to contribute additional amounts in proportion to their contributions in the Guarantee Fund, and credit such amounts to the Guarantee Fund account with the Settlement Bank.
          3. The Exchange shall resume provision of services to the brokers who pay the amount required to replenish the Guarantee Fund and the Unit shall immediately notify the relevant parties of such resumption of services.

        • Article 37 Liquidity Reserve

          1. The liquidity reserve account shall be used where the value of the transaction exceeds the permissible trading limit for any broker, according to the formula provided for in Article (11) of the Resolution No. 4/2000 on the Establishment of the Guarantee Contribution Fund, provided that the value of the relevant transaction shall not exceed the Guarantee Fund balance at the time of the application.
          2. The broker, who wishes to increase his permissible limit of trading according to Article (11) of Resolution No. 4/2000 on the Establishment of the Guarantee Fund, shall submit an application to the designated official at the Exchange, and the Exchange may accept or reject the application at its own discretion.
          3. The Exchange may, on reviewing the application submitted by the participating broker, give sufficient consideration to the factors provided for in Articles (3-11) of the Resolution No. 4/2000 on the Establishment of the Guarantee Contribution Fund, and in the event of rejection of the application, the Exchange shall notify the broker of the reasons for the rejection.
          4. The broker shall, upon acceptance of his application, deposit the total value of the transaction in the liquidity reserve account not later than 09:30 a.m. on (T+1).
          5. The broker shall be deemed to have failed to pay the value of the transaction on the liquidity reserve account by 09:30 a.m. on T+1, if no confirmation is received by the Unit from the Settlement Bank, stating that the broker has paid the claimed amount to the liquidity reserve account at the time fixed by Article (4) above.
          6. The Exchange may prevent the participating broker who fails in the payment of the value of the transaction in the liquidity reserve account by 09:30 a.m. on T+1 from entering the Trading Floor, suspend the trading, clearing and settlement services provided to such broker, and may order the sale of the purchased shares through any other broker on T+2.
          7. In the event of application of paragraph (6) above, the procedures for the sale of shares provided for in Article (31) above shall be followed.

        • Article 38 Execution of Transactions Whose Value Exceeds the Guarantee Fund Balance

          1. Notwithstanding the provisions of Article (37) of these procedures, the participating broker must provide the value of the deal in cash, or provide any security that would be acceptable to the Exchange where the value of the transaction placed for execution exceeds the Guarantee Fund balance at the time of application.
          2. The security referred to in paragraph (1) above shall be provided to the Exchange and may be deposited in the liquidity reserve account prior to the execution of the transaction. The broker may cancel or modify the said security if he sells the purchased shares in the same trading session.

        • Article 39 Parties Authorized to Provide Custodial Services at the Exchange

          The securities custodial services shall be provided at the Exchange by brokerage companies licensed pursuant to the Minister of Commerce and Agriculture's Resolution No. 2/1995 on the Services Provided by Brokerage Companies at the Exchange.

          The Exchange may permit banks and other financial institutions to provide such services, subject to obtaining the prior approval of the Bahrain Monetary Agency.

        • Article 40 Participation of Banks and Financial Institutions in the Membership of the Central Depository

          Banks and financial institutions wishing to provide securities custodial services in the Exchange may participate in the membership of the Central Depository. They should submit their applications to the Exchange, accompanied by the following documents:

          1. Approval of the Bahrain Monetary Agency.
          2. Copy of the Memorandum and Articles of Association.
          3. Copy of the Commercial Registration.
          4. Copy of its Board of Director's Resolution approving the provision of securities' custodial services at the Exchange.

        • Article 41 Services Provided By Securities Custodians

          The custodian shall directly provide the following services in the Central Depository on behalf of his clients:

          1. Obtain an Investor's Number for his clients.
          2. Open securities accounts for his clients.
          3. Deposit securities for his clients.
          4. Transfer securities from his clients' accounts with brokers, to their accounts with other brokers.
          5. Transfer ownership of his clients' securities as transaction exempted from trading at the Exchange.
          6. Mortgage and release his clients' mortgaged securities.
          7. Amend and update his clients' particulars.
          8. Apply for obtaining statements of his clients' accounts, reports and letters issued by the Central Depository for them.
          9. Any other services approved by the Exchange.

        • Article 42 Provision of Central Depository Services Contract

          The services provided for in Article (41) above shall be provided by a contract to be made with the beneficial owner, where rights and obligations of the two parties shall be defined, provided that the contract shall include, inter alia, the following:

          1. The scope of services provided by the participating member to his clients and the commission payable to him for providing such services.
          2. Conditions relating to the management of the clients' securities accounts.
          3. Attendance of general meetings and voting on behalf of the clients.
          4. Reports and statements of accounts to be submitted to the client and the time and manner in which they will be presented. The custodian should inform his clients of the securities deposited in his account with the Central Depository within three days from the date of deposit.

        • Article 43 Custodian Responsibilities

          The custodians shall dispose of the securities deposited in their names on behalf of their clients and shall bear all legal and financial consequences resulting from their actions.

        • Article 44 Execution of Sale and Purchase Orders Issued to the Custodians

          The custodians who are not brokers shall carry out orders issued to them from their clients for the sale and purchase of securities through approved brokerage companies and brokerage offices at the Exchange.

        • Article 45 Clients Accounts

          A client should not open more than one account with a broker if he has opened a previous account in his name with the same broker by a custodian appointed by him.

        • Article 46 Transactions Exempted From Trading

          The Unit may transfer the ownership of securities as transactions exempted from trading, upon the request of the custodian, according to Article (36) of the Internal Regulations as amended.

        • Article 47 Amendment of Procedures

          The Exchange may, from time-to-time, amend these procedures, provided that brokers and the members participating in the Central Depository System are notified of such amendment upon the issuance thereof.

      • Standard Agreement for the Provision of Trading, Settlement, Clearing and Central Depository Services

        This Agreement is made on.........................

        Between:

        1-......................................., whose address is at........................ (the Client)

        and

        2-......................................., whose address is at........................ (the Broker)

        Whereas:

        I- The Client wish, from time to time, to deposit, purchase, sell or perform any of the other transaction on the securities listed on the Bahrain Stock Exchange and would like to appoint the Broker to provide settlement, clearing and central depository services associated with the execution of sale and purchase transactions
        II- The Broker accepts such appointment to provide settlement, clearing and central depository services in accordance with the conditions and terms of this Agreement.

        NOW, it is hereby agreed

        1-..................................................

        In this Agreement:

        "Securities" means shares and debentures issued by Bahraini joint stock companies, bonds and notes issued by the Government or any public institution or any other Bahraini or non-Bahraini securities approved for trading by the Exchange Board of Directors.
        "Deal" means the completion of execution of sale or purchase order of securities

        All terms and expression used in this Agreement shall be interpreted in accordance with the provisions of the Exchange Law and Internal Regulations.

        1- Representations and warranties by the Client
        The Client represents and warrants that:
        i) For individuals: he has attained majority (21 years) and has the required legal capacity to perform all obligation imposed on him.
        ii) For Companies: that it has the required legal status and the authority to enter into this Agreement and perform its obligations there under and that the person signing this Agreement and the person who will issue instructions to the broker are duly authorized to carry out these acts.
        2- Acknowledgements by the Client
        i) The Client confirms his knowledge of the nature and requirements of dealing in securities and the risk involved in dealing with securities which may result in an unexpected losses and that he is prepared and financially capable to bear the losses which may result there from, unless such losses are due to the negligence or default of the broker or his non-compliance with the orders and instructions issued by the client or to violations committed by the broker to the laws and regulations applicable to the Exchange.
        ii) The client hereby authorize the broker and unless otherwise notified in writing, to act in compliance with orders and instructions issued by the client or by his duly authorized representation and the broker hereby confirms that he will comply with such orders and instruction and will all documents signed by the client or his authorized representative.
        3- Clients' Orders and Instructions
        1- Where the client resolves to open a securities account and deposit such securities with the broker or enter into any deal or issue instruction with respect to any deal, the client shall issue his orders and instructions to the broker in this respect by facsimile, electronic mail or through the telephone and shall state the investor's number and the relevant securities account number.
        2- The broker may for the protection of either party record in a tape the orders and instructions received from the Client through the telephone so that such recording may be used in any potential dispute between the Client and the broker.
        3- Where orders and instructions are made by facsimile, electronic mail or telephone the message should be signed by the Client and the signed original should be promptly sent to the broker by urgent or hand delivery.
        4- The Client shall inform the Broker of all details of the service or deal which he wish to perform in though the Broker.
        5- The Broker may, at his own discretion, refuse to carry out any orders or instruction prior to the receipt of written confirmation signed by the Client or his authorized representive.
        6- No correspondence addressed by the Client to the Broker is deemed valid or binding on the Broker until effectively delivered to the Broker and is in compliance with the Exchange Laws and Regulations.
        7- The Broker shall act on behalf of the Client in compliance with the order and instructions received from the Client. The Broker shall verify the identity of the Client and the accuracy of the orders and instructions received from him and shall exert all efforts to carry out such orders within the shortest possible time in compliance with the BSE prevailing laws and regulation and the provisions of this Agreement.
        8- The Client recognizes that the market situation is volatile with respect to the prices of securities and may require the Broker to contact the Client before executing the orders and instructions issued to him and the Broker shall execute such orders and instructions in accordance with the last instruction issued by the Client.
        The Broker is not obliged to contact the Client in the event of the above mentioned changes. However, if the Broker resolves to contact the Client and was unable to do this due to the Client absence, failure in the communication system or for any other reason the Broker may act in accordance with orders and instructions issued to him or suspend execution of such orders and instruction, at his discretion, where the Broker deems that the situation in the Exchange requires such suspension and the Broker shall not be liable for any losses sustained by the Client as a result thereof.
        4- Settlement and Clearing Services
        1- The Broker shall not commence carrying out the Clients' order to sell any securities unless the Clients' account has sufficient balance of securities to complete the sale order.
        2- If the deal relates to purchase securities the ownership of such securities and the entry in the Clients' account shall be effected upon the payment of its value in accordance with the settlement, clearing and central depository regulations applicable to the Exchange.
        3- Subsequent to the execution of the Clients' order the Broker shall send a written notification to the Client as soon as possible throw communication means unproved by the Exchange
        4- The Client acknowledges that the Broker, in providing the settlement, clearing and central depository services in accordance with the provisions of this Agreement shall be acting s a commission agent or mediator on behalf of the client and that as a matter of principle the broker is not authorized o exercise any discretion in carrying out the Clients' order and shall comply with the express orders and instructions of the Client. Accordingly, the Client responsible for all consequences resulting from the execution of deals conduced for his account caused by the fluctuations in the prices or any other reasons beyond the control of the Broker.
        The Broker may deal in the Clients securities in accordance with the Securities Account Management Agreement without receiving any orders or instructions from the Client where the Broker is authorized to do this in accordance with the provision of Resolution No.2/1995 and in such event, the Portfolio Management Agreement between the Client and the Broker shall be deemed to constitute an integral part of this Agreement and shall be attached to it.
        5- The Broker shall book keep the records required for the record of all orders, instructions, transactions and deals performed by the Broker for the account of the Client recorded by the date and time in the manner determined by the Exchange and such records shall be subjected to supervision and control.
        6- Commission
        The shall pay to the Broker, in consideration for the services provided by this Agreement the amount of fee, mutually agreed by the parties.
        7- Information and Advices
        1- When providing advices to the Client, the Broker shall depend on information and data derived from reliable sources and shall furnish such advices and information in good faith and for the benefit of the Client.
        2- The Client aggress to the following:
        a- Any recommendations, information or advices received from the Broker about the securities' market is deemed to be a mere opinion which is liable to be inaccurate or incomplete despite the fact that it my be obtained from reliable sources as deemed by the broker.
        b- That the Broker does not provide confirmation or guarantees with respect to the consequences of advices provided by him and that the Broker shall not be responsible for the accuracy or scope of such of such advices or the dependence of the Client thereon and the Client confirms that while he may take such advise into account he will take the final decision based on his own judgment.
        8- Undertaking of the Client.
        The Client undertakes to:
        1- bear any losses resulting from deals concluded for his account and the Broker shall not be considered responsible for these losses unless such losses are the direct result of the Broker's negligence or default.
        2- bear all losses resulting from errors which may be included in the correspondence and communications made through the telephone, facsimile or electronic mail unless such losses are the direct result of the Broker's negligence or default.
        3- bear the responsibility for any deal or transaction properly performed by the Broker upon the orders and instructions of the Client and should the Client default in satisfying any obligation towards the Broker under this Agreement or under the Bahrain Stock Exchange Law the Client undertakes to compensate the Broker for any obligations born by the Broker as a result of the Client's failure, default or omission.
        9- Broker's Responsibilities
        1- The Broker shall bear all losses or obligations resulting, directly or indirectly from his malpractice or negligence in the execution of orders issued to him by the Client. However, the Broker shall not be liable for the acts of any third party associated with the performance of this Agreement.
        2- The Broker shall not be responsible towards the Client for any losses or obligations which is the direct result of the bankruptcy, insolvency or liquidation, or the placing under judicial custody of any issuer of securities or any broker or member of the settlement, clearing and Central Depository System or of any other party associated with the performance of this Agreement.
        10- The Right to object to withdrawal or transfer of Securities.
        The Broker may, in order, to ensure satisfaction of the obligations due from the Client object to the withdrawal or transfer of the securities deposited with him in the Clients account to any other account and the Broker may resell such securities. However, such sale may only be conducted after obtaining the consent of the Exchange to the sale, in accordance with the provisions of Resolution No. 3/2000 on the Settlement, Clearing and Central Depository Rules.
        11- Correspondence
        1- All correspondence, reports, statements and notices shall be sent to the Client at his address as stated in this Agreement.
        2- The Client shall send all correspondence and instructions to the Broker at his address as stated in this Agreement.
        12- Term and Termination
        The Parties may renew the term of this Agreement provided that such renewal shall come into effect from the date of signature thereof by both Parties. Either Party may, only terminate this Agreement by a three month written notice from the date thereof. All rights and obligations resulting from the performance of this shall continue to be valid and enforceable.
        13- Joint Liability
        Where the Broker companies more than one person they shall all be, jointly and severally liable for the satisfaction of the obligations resulting from the application of the provision of this Agreement.
        14- Force Majeure
        The Broker shall not be liable to the Client for any default, omission or breach of this Agreement, which is due to force majeure or to any unforeseeable external cause such as natural disasters, war, strikes and civil disobedience etc.
        15- Severability
        In the event that any provisions contained in this Agreement are found to be invalid, unlawful or unenforceable to any extent by any law, resolution or court decree the remaining provisions of this Agreement shall continue to be valid and enforceable.
        16- Notices
        Any correspondence or other communication between the Broker or the client shall be sent by telephone, facsimile or electronic mail (as the case may be) at the address shown below or such other address notified from time to time in writing to the other party:
        Client
        Address.......................
        Telephone...................
        Fax............................
        Electronic mail.............

        Broker
        Address......................
        Telephone...................
        Fax............................
        Electronic mail.............
        17- Amendment of the Agreement
        No variation of this Agreement shall be valid unless it is mutually agreed, in writing and notified to the Exchange. However either party may terminate this Agreement if the other party does not agree to his proposed amendments within 14 days from the date of notification thereof.
        18- Law & Jurisdiction
        1- This Agreement shall be governed and construed by the laws of the state of Bahrain.
        2- Any dispute arising between the parties in respect of trading in securities or performance of this Agreement shall be resolved in accordance with the provisions of Chapter 7 of the Exchange Internal Regulations.

        Signed by:

        Investors No.

                               

        (Client)............................... Signature..........................

        Account No.

                               

        Type of Account..........................................

        Account No.

                               

        Type of Account.............................................

        (Broker).................... Name............................ Signature.....................

  • BHB Guarantee Contribution Fund Resolution

    • Resolution No. (4) of 2000 With Respect to the Establishment of a Guarantee Contribution Fund At The Bahrain Stock Exchange

      The Chairman of the Board of Directors:

      After perusal of Amiri Decree No. (4) of 1987 pertaining to the establishment and organization of the Bahrain Stock Exchange;
      And the Internal Regulations of the Bahrain Stock Exchange, issued by the Minister of Commerce and Agriculture's Resolution No. (13) of 1988;
      And the Chairman of the Bahrain Stock Exchange's Resolution No. (3) of 2000, pertaining to the Clearing, Settlement, Depository and Registry Rules;
      And upon the proposal of the Director of the Bahrain Stock Exchange;

      Have resolved as follows:

      • Article (1)

        The provisions of this Resolution shall be applied temporarily during the testing period of the application of the CSDR System at the BSE. The BSE's Management shall develop such provisions during the said period and propose its issuance in a final form after ascertaining its compliance with the CSDR.

      • Article (2)

        Notwithstanding the provisions of Article (1) above, the Director of the BSE may issue the necessary resolutions and procedures for the implementation of the provisions of this Resolution, and must inform the Chairman of the BSE's Board of Directors therewith from time-to-time. The Chairman may cancel or suspend the implementation of such resolutions or procedures.

      • Article (3)

        The Director of the BSE shall implement the provisions of this Resolution, effective from the date of its signature.

        Ali Saleh Al Saleh
        Minister of Commerce
        Chairman of the Bahrain Stock Exchange
        Board of Directors

        Issued on 2nd Ramadan 1421 H
        Corresponding to 28th November 2000

    • Article (1) Definitions

      For all purposes of this Resolution, the following definitions shall apply, as stated below:

      The BSE: shall mean the Bahrain Stock Exchange.
      BATS: shall mean the BSE's Automated Trading System.
      The CSU: shall mean the BSE's Clearing and Settlement Unit.
      The Guarantee Fund: shall mean the Guarantee Contribution Fund established under this Resolution.
      The CSDR System: shall mean the BSE's Clearing, Settlement, Depository and Registry System.
      The Settlement Bank: shall mean the regulated bank which provides the BSE and its Participants with the necessary facilities to effect payments relating to the settlement of securities transactions executed on the BSE, in accordance with this Resolution.
      The Contribution: shall mean the amount that a Participant pays into the Guarantee Fund account upon admission into the BSE's Clearing and Settlement System.
      Purchased Securities: shall mean securities where the value has not been paid in full on the Settlement Day.
      The Committee: shall mean the Guarantee Fund's Management Committee.
      Participant: shall mean the BSE's member who is accepted and permitted by the BSE to effect transfer of securities and other entries in relation to securities traded on the BSE by means of the CSDR system.
      Participants' Accounts: shall mean the Participants' clearing and operating accounts with the Settlement Bank
      Settlement Day: shall mean the designated day for settlement of obligations resulting from trades on the BSE.

    • Article (2) Establishment of the Guarantee Fund

      2.1 The BSE's Board of Directors shall establish a Guarantee Contribution Fund, which shall be managed and utilized by the BSE, at its discretion, to satisfy any liability caused by a Participant's failure to fulfill his obligation to pay the net to pay balance on the Settlement Day (T+2).

    • Article (3) Membership

      3.1 The Guarantee Fund membership shall be open to Participants who contribute to the Guarantee Fund account, in accordance with the provisions of this Resolution.
      3.2 All contributing Participants shall be wholly and individually liable for the fulfillment of their obligations arising from securities transactions for which the BSE has carried out clearing and settlement, in accordance with the BSE's CSDR Rules and Procedures.
      3.3 The subject of joint and individual liability referred to above shall not include the obligations of the Participants to pay fees for services rendered, or the payment of any fines or charges imposed.

    • Article (4) CSDR System Membership Agreement

      4.1 The BSE shall conclude CSDR System Membership Agreements with the Participants, specifying their mutual rights and obligations towards the Guarantee Fund and the effects of their failure to discharge their obligations towards the settlement of their transactions, and any other issues relating to clearing and settlement.

    • Article (5) Management of the Guarantee Fund

      5.1 The Guarantee Fund shall be managed by a three-member special Committee, to be appointed by the Chairman of the BSE's Board of Directors. The Committee shall be responsible for setting the overall policies of the Guarantee Fund and exercising the general supervision of its performance.
      5.2 The BSE shall be assigned the day-to-day management of the Guarantee Fund through its Operations Department.
      5.3 The constitution of the Committee shall be as follows:
      5.3.1 One member representing the BSE, who shall be the Chairman.
      5.3.2 One member representing the brokerage companies, to be nominated by the BSE's members.
      5.3.3 One member representing the Settlement Bank.
      5.4 The term of the Committee membership shall be three years renewable for a similar term or terms.
      5.5 Members of the Committee shall discharge their responsibilities in accordance with the provisions of this Resolution, without remuneration.

    • Article (6) Management Fee

      6.1 For managing the Guarantee Fund, the BSE shall charge the Guarantee Fund a management fee calculated at the rate of 0.25% of the Guarantee Fund's amount per annum. The BSE shall have the right to review the above management fee, subject to its sole discretion.

    • Article (7) Participants Contribution

      7.1 Upon admission to the CSDR System, the Participant shall pay a fixed minimum contribution to the Guarantee Fund account opened with the designated Settlement Bank.
      7.2 Contributions to the Guarantee Fund account must be segregated from the BSE's assets, however they need not be segregated from the other Participants assets.
      7.3 Each Participant, for the duration of his membership, shall contribute a fixed amount to the Guarantee Fund account, which at present shall be as follows:
      7.3.1 A minimum of BD50,000 (Bahraini Dinars fifty thousand) for Participants who are Class (A) brokers (incorporated in accordance with the Chairman of the BSE's Board Resolution No. 2/95).
      7.3.2 A minimum of BD25,000 (Bahraini Dinars twenty five thousand) for the Participants other than Class (A) brokers (incorporated in accordance with Article (16) of the BSE's Internal Regulations).

    • Article (8) Review of Contributions

      8.1 The BSE shall have the right to review the Participants contributions from time-to-time, subject to its sole discretion, or if a higher Trading Cap Limit is requested. If the new amount of the contribution is higher than the previous one, Participants are required to pay into the Guarantee Fund account the difference between the previous contribution and the new one.
      8.2 The BSE may also require the Participants to make additional contributions to the Guarantee Fund account, based upon anticipated average trading volume, or current (net or gross) settlement obligations.
      8.3 All Participants must maintain the fixed minimum contribution established by the BSE at all times.
      8.4 Any increase of the minimum fixed contribution amount or any additional contribution amount shall be paid within five (5) days after receipt of the CSU's written request to pay such contributions.

    • Article (9) Guarantee Fund Account

      The BSE shall place the individual contribution amounts on deposit with the designated Settlement Bank, in an independent account in the name of the BSE. Any interest received from such deposits of cash contributed which are in excess of the minimum cash contribution (less the BSE's maintenance fees) shall be accrued to the Participants not in default of their obligations under the CSDR Rules.

    • Article (10) Allocation of Interest

      10.1 The Settlement Bank shall calculate the portion of interest earned on the Guarantee Fund's investments or deposits, according to the terms agreed with the BSE. Such interest shall accrue to Participants at least annually and in proportion to the amount and time that such Participant's contribution has been deposited with the Guarantee Fund account.
      10.2 Charges and fees arising from the Guarantee Fund's management shall be allocated by the Settlement Bank to individual Participants upon the CSU's instructions, in proportion to the amount of a Participant's contributions to the Guarantee Fund account, and shall be compensated with the interest earned.
      10.3 The CSU shall promptly notify the Participants in respect of any interest on funds invested and charges of the costs of managing the Guarantee Fund, and in respect of payment or accrual of such amounts respectively.

    • Article (11) Trading Cap Limits

      11.1 The BSE shall set a cap on the multilateral net debit position of each Participant, to be calculated in accordance with the following formula:

      Cap Limit = Collateral + (Capital x Risk Factor)
      (Number of Settlement Days + Reserve Settlement Days) X Maximum Risk
      11.2 The 'Risk Factor' referred to in sub-Article (11.1) above shall be 1/3, 'Settlement Days' shall be 3 working days, 'Reserve Settlement Days' shall be 3 working days, and the 'Maximum Risk' shall be 10% per day.
      11.3 The BSE may increase or decrease the Participant's Trading Cap Limit, or ask the Participant to pay the trading amount allowed over and above the Trading Cap Limit subject to this Article in full, in accordance with the prescribed procedure. In taking the above action, the BSE shall give special consideration to the relevant factors, i.e. the Participant's frequency and volume of his trading activities, his financial position, solvency, ability to increase his contribution to the Guarantee Fund, his past experience in the settlement of transactions executed under Article (20) hereof, the client's financial position, liquidity of securities and volume of the transactions intended to be executed.

    • Article (12) Utilization of the Funds

      12.1 The BSE shall use the assets of the Guarantee Fund contribution as collateral for the credit facility to be provided by the Settlement Bank, for the settlement of the net to pay obligations arising from securities transactions concluded on the BSE for individual Participants who fail to settle their obligations, or if the funds of the Liquidity Reserve, in accordance with Article (20) hereof, do not suffice for the fulfillment of obligations pertaining to the concluded transactions on the BSE.
      12.2 If a Participant fails to pay his net to pay balance not later than 09:30 hours on Settlement Day (T+2), the amount of deficiency shall be debited from the Guarantee Fund account and credited to the BSE's clearing account.

    • Article (13) Insufficiency of the Guarantee Fund's Amount

      13.1 If the Guarantee Fund's amount is not sufficient for the settlement of the Participant's money obligations, the following shall apply:
      13.1.1 In the case where the Settlement Bank informs the CSU on Settlement Day (T+2) not later than 09:45 hours that the total amount of cleared funds received into the BSE's clearing account is lower than the total amount of net to pay balances of all Participants, the CSU shall immediately instruct the Settlement Bank to activate the Guarantee Fund account.

      In such case, the Settlement Bank shall also inform the CSU which Participant(s) have failed to credit the net to pay amount into the BSE's clearing account.
      13.1.2 In the case of activation of the Guarantee Fund account, the CSU shall immediately instruct the Settlement Bank:
      13.1.2.1 To debit the Guarantee Fund account for the amount of the deficiency;
      13.1.2.2 To credit the BSE's clearing account for the amount of the deficiency;
      13.1.2.3 To send the CSU an invoice specifying all related expenses, interest and fees for effecting the Guarantee Fund account after full payment has been made by the defaulting Participant.
      13.2 In the case referred to in sub-Article (13.1.2) above, the CSU shall immediately on Settlement Day (T+2) not later than 09:50 hours:
      13.2.1 Suspend the defaulting Participant from the services and activities related to trading, clearing and settlement functions;
      13.2.2 Disable the defaulting Participant's employees from using the CSDR's log-on identification code;
      13.2.3 Send the defaulting Participant a message through the CSDR system regarding the suspension of the services and amounts due to be paid by him;
      13.2.4 Send the defaulting Participant a written notice, including information regarding:
      13.2.4.1 The amount of deficiency;
      13.2.4.2 Settlement Bank expenses and interest for activating the Guarantee Fund account;
      13.2.4.3 BSE expenses for activating the Guarantee Fund account;
      13.2.4.4 The amount of surcharge on a Participant for the violation of the BSE's regulations;
      13.3 For the purpose of suspending the defaulting Participant from the BSE's trading activities, the CSU shall immediately inform the Trading and Members Affairs Unit by telephone call and through the BSE's internal electronic mail system thereafter, to disable the defaulting Participant's employees from using the BATS log-on identification code, before the trading starts (09:50 hours).
      13.4 The CSU shall order the defaulting Participant to replenish the deficiency in the Guarantee Fund's account. The defaulting Participant shall instruct the Settlement Bank to credit the Guarantee Fund account with the total amount due to pay, as per the notice from the CSU.
      13.5 After receiving the confirmation from the Settlement Bank that the total amount due for payment is credited to the Guarantee Fund account, the BSE shall reinstate the trading, clearing and settlement services to the defaulting Participant. For that purpose, the CSU shall enable the defaulting Participant's employees to use the CSDR System log-on identification code, and inform (in writing) the BSE's Trading and Members Affairs Unit, to enable them to access the system once more.

    • Article (14) Replenishment of the Guarantee Fund by a Defaulting Participant

      14.1 A Participant who fails to settle his net to pay amount on the Settlement Day (T+2) not later than 09:30 hours, causing the BSE to settle its payment obligations to other Participants from the Guarantee Fund account, shall be obliged to replenish the Guarantee Fund account with the value of the amount previously withdrawn by the BSE.
      14.2 If the BSE established one day after the Settlement Day (T+3) not later than 09:30 hours that the Participant has failed to pay the amount withdrawn by the BSE from the Guarantee Fund account to settle his net to pay amount, the BSE shall impose on the defaulting Participant a delay charge, in accordance with Article (21.1) hereof, and shall instruct him in utmost confidentiality to sell the purchased securities through another Participant.
      14.3 If the Participant fails to sell the purchased securities through the authorized Participant on T+3, the BSE may give him an additional day to effect the selling on T+4.
      14.4 If the Participant fails to sell the purchased securities through the authorized Participant on T+4, the BSE shall on T+5 instruct the Trading and Members Affairs Unit to sell the said securities by auction.
      14.5 If by 09:00 hours on T+6 the CSU established that the proceeds of sold securities, in accordance with Article (14) hereof, are not sufficient for reimbursement of the required amount to the Guarantee Fund account, the Participant shall be obliged to pay the difference. The surplus, if any, shall be paid to the concerned investor after deducting all the charges and expenses due from the Participant.

    • Article (15) Replenishment of the Guarantee Fund by Other Participants

      15.1 If by 09:00 hours on T+7 the CSU has established that the Participant failed to pay the difference referred to in sub-Article (14.5) above, and ascertained the exhaustion of the Guarantee Fund amount, the BSE shall immediately request all Participants to replenish the Guarantee Fund account and instruct the Settlement Bank to credit the Guarantee Fund account for such amounts.
      15.2 The CSU shall determine the amount of the individual Participant's remittance referred to in sub-Article (15.1) hereof, in accordance with the following formula:

      Net total (remaining) value
      Number of Participants - Number of failed Participants
      15.3 Immediately after the calculation of the amounts of remittance, the CSU shall send to all Participants a written notice specifying the individual amount of payment and the method of calculation. Participants shall instruct the Settlement Bank to credit the Guarantee Fund account with such amounts not less than the next business day after the receipt of such notice.

    • Article (16) Suspension of BSE Services to a Defaulting Participant

      16.1 If a Participant fails to pay the net to pay amount on T+2 no later than 09:30 hours, the BSE shall, and until the amount is honored as per Article (13) hereof, suspend the defaulting Participant from:
      16.1.1 Any trading service provided by the BSE, with respect to securities transactions generally.
      16.1.2 All services and activities in relation to the clearing and settlement operations of a Participant, except services in relation to any pending settlement obligations the defaulting Participant may have.
      16.2 When a Participant settles his net to pay amount, the BSE may resume rendering the services referred to in sub-Article (16.1) above, and shall immediately notify the concerned parties therewith.
      16.3 The BSE may, subject to its sole discretion, invoke the provisions of Article (26) of the CSDR Rules on the Participant, if such Participant fails to settle his net to pay amount more than twice a year.

    • Article (17) Disposition of Participants' Purchased Securities in Favour of the BSE

      17.1 To secure due payment of net to pay amounts due from a Participant to the BSE, the BSE shall have the right to dispose of all or any securities purchased in favour of the failing Participant, provided that the right of disposition shall subsist until such time as the failing Participant's obligations have been fulfilled.
      17.2 The proceeds of resale of the purchased securities shall be transferred to the BSE's operating account. The CSU shall immediately upon receipt of such amounts instruct the Settlement Bank to debit the BSE's operating account and credit the Guarantee Fund account for the amount of such proceeds of sale of mortgaged securities, net of any commission, costs, fees and expenses.

    • Article (18) Termination of BSE Services

      18.1 The BSE may terminate forthwith its trading, clearing and settlement services to individual Participants, if the Participant:
      18.1.1 By 09:30 hours on Settlement Day (T+2) fails to pay the required amount of his net to pay amount to the BSE's clearing account with the Settlement Bank.
      18.1.2 Fails to pay his basic contribution and additional contribution to the Guarantee Fund account within five (5) days after receipt of the BSE's request through the CSU.
      18.1.3 Fails to remit the outstanding amount for replenishment of the Guarantee Fund account, pursuant to Article (14) of this Resolution.
      18.2 In the event that the BSE terminates its services to a Participant according to sub-Article (18.1) above, the CSU shall return to the Participant his contribution to the Guarantee Fund and any accrued interest on his contribution within fifteen (15) days from the date of termination of the BSE's services to the Participant, provided that such a Participant has satisfied all his obligations to the BSE and the Settlement Bank.

    • Article (19) Termination of Securities Settlement to All Participants

      19.1 If the BSE establishes that, due to the outstanding net to pay amounts of one or more Participants, or due to the remittance of funds to credit the Guarantee Fund account, the total amount of the Guarantee Fund has been reduced by more than 50% of its original value, the BSE may terminate its trading, clearing and settlement services to all Participants.
      19.2 Subject to sub-Article (19.1) above, the BSE shall request all Participants to contribute proportional amounts to the Guarantee Fund account and for that purpose credit the Guarantee Fund account with the Settlement Bank.
      19.3 The BSE shall resume its services to those Participants who have paid the amounts for replenishment of the Guarantee Fund account, and the CSU shall immediately notify the Parties concerned.

    • Article (20) Liquidity Reserve

      20.1 The Liquidity Reserve account should be used when the value of the transaction exceeds the Participant's Trading Cap Limit, as prescribed in Article (11) hereof, provided that the value of the said transaction should not exceed the balance of the Guarantee Fund account at the time of application.
      20.2 A Participant who wishes to exceed his Trading Cap Limit specified in Article (11) hereof, must file an application with the BSE's designated staff to that effect, and the BSE shall have the right to accept or reject such application, subject to the BSE's sole discretion.
      20.3 In verifying the Participant's application, the BSE should accord special consideration to the factors prescribed in Article (11.3) hereof, and shall advise the Participant of the reasons for rejecting his application, if the BSE declines to accept such application.
      20.4 Following the acceptance of his application, the Participant must deposit in the Liquidity Reserve account on T+1 no later than 09:30 hours, 30% of the value of the transaction. The remaining 70% shall be deposited in the Liquidity Reserve account on T+2 no later than 09:30 hours.
      20.5 It shall be deemed that a Participant has failed to pay the 30% and the remaining 70% of the Liquidity Reserve amount by 09:30 hours on T+1 and T+2 respectively, if confirmation has not been received from the Settlement Bank that the Participant has submitted the appropriate payment to the Liquidity Reserve account in the time referred to in sub-Article (20.3) above.
      20.6 The BSE may disable a particular Participant who has failed to pay the 30% of the Liquidity Reserve amount on T+1 no later than 09:30 hours from entering the Trading Floor, terminate its services of trading, clearing and settlement to him, and order the shares to be sold through another Participant on T+2.
      20.7 In the event that a Participant fails to pay the remaining 70% of the Liquidity Reserve amount on T+2 no later than 09:30 hours, the BSE may disable the defaulting Participant from entering the Trading Floor, terminate its services of trading, clearing and settlement to him and order the shares to be sold through another Participant on T+3.
      20.8 In executing the provisions of sub-Articles (20.6) and (20.7) hereof, the BSE shall apply the procedure prescribed in Article (14) hereof with respect to the selling of securities.

    • Article (21) Execution of Transactions Exceeding the Balance of the Guarantee Fund's Account

      21.1 Notwithstanding the provisions of Article (20) hereof, the Participant must pay the value of the transaction in cash, or provide any type of guarantee acceptable to the BSE, if the value of the transaction exceeds the balance of the Guarantee Fund at the time of application.
      21.2 The guarantee referred to in sub-Article (21.1) above, must be provided prior to the execution of the transaction, and shall be deposited in the Liquidity Reserve account. The Participant shall have the right to cancel the said guarantee or amend it, if he re-sold the shares he bought at the same trading session.

    • Article (22) Financial Record and Auditors

      22.1 The Guarantee Fund shall have independent financial records to be audited, together with the annual financial statements, by an independent auditor who shall be appointed by the Chairman of the Board of Directors of the BSE. The auditing costs which are considered as part of the Guarantee Fund's administrative expenses, shall be paid by the BSE on behalf of the Fund and reimbursed thereafter from the Participants, in accordance with Article (10-2) hereof.

  • BHB Brokers & Custodians Resolutions

    1. Resolution No. (2) of 2002, in respect of the provision of custodial services through the Central Depository system at the Bahrain Stock Exchange.
    2. Resolution No. (2) of 2000, in respect of brokerage companies and financial institutions attending the General Assembly Meetings on behalf of their clients.
    3. Resolutions No. (4) of 1999, amending certain provisions of the Bahrain Stock Exchange's Internal Regulation.
    4. Resolution No. (2) of 1995, in respect of services provided by brokerage companies at the Bahrain Stock Exchange.

    • Resolution No. (2) of 2002 in Respect of the Provision of Custodial Services through the Central Depository System at the Bahrain Stock Exchange

      The Chairman of the Exchange's Board of Directors:

      After perusal of Decree Law No. (4) of 1987, pertaining to the establishment and organization of the Bahrain Stock Exchange,
      And Decree Law No. (23) of 1973, in respect of establishment of the Bahrain Monetary Agency and its amendments,
      And the Minister of Commerce and Agriculture's Resolution No. (13) of 1988, regarding the issuance of the Exchange's Internal Regulation and its amendments,
      And the Chairman of the Bahrain Stock Exchange's Resolution No. (3) of 2000 pertaining to the Clearing, Settlement, Central Depository and Registry Rules,
      And the Minister of Commerce and Agriculture and Chairman of Bahrain Stock Exchange Resolution No. (2) of 1995, pertaining to the services provided by the brokerage firms at the Bahrain Stock Exchange,
      And upon the submission of the Director of the Bahrain Stock Exchange,
      And the approval issued by the Bahrain Stock Exchange's Board of Director at the its meeting No. (3/4) of 2002.

      RESOLVED AS FOLLOWS:

      • Article (1)

        Custodian: shall mean the participating member of the Clearing, Settlement and Central Depositary System other than the brokerage company licensed by the Minister of Commerce and Agriculture's Resolution No. (2) of 1995, to provide the services of custody, transfer of securities' and settlement of commitments resulting from trading on behalf of his clients.

      • Article (2)

        Companies other than brokerage companies licenced to provide custodial services pursuant to the Minister of Commerce and Agriculture's No/ 2/1995 may be admitted in the membership of Central Depository on the Exchange according to the following conditions:

        1- The company should be a Bahraini joint stock company, a limited liability company, a branch of a foreign company or an exempted company licensed to operate in Bahrain.
        2- The company's objects clause should include the provision of custodial services.
        3- The company shall undertake the following:
        a- To separate its assets and accounts from the securities of client's to whom it provide custodial services.
        b- To provide the custodial services in accordance with the standard agreement for the provision of custodial service approved by the Exchange.
        c- To implement the provisions of this Resolution and abide by the rules, regulations and procedures related to the Clearing, Settlement and Central Depositary issued by the Exchange from time to time.
        4- The company should have not been convicted for any crime of money laundering or mismanagement of its client's accounts or funds.
        5- Any other conditions stipulated by the Exchange.

      • Article (3)

        The company should present to the Exchange a formal application for admission in the Central Depositary membership for the provision of custodial services together with the following attachments:

        1- A copy of the Memorandum and Articles of Association.
        2- A copy of the Commercial Register Certificate.

        Banks and financial institution under the supervision of the Bahrain Monetary Agency must attach with the above documents the Agency's approval for the provision of custodial services..

      • Article (4)

        The company should pay the following fees:

        1- Registration fee of BD1000 (Bahraini Dinar one thousand) to be paid once.
        2- Annual subscription fee of BD500 (Bahraini Dinar five hundred).

      • Article (5)

        The obligations referred to in Clause (3) of Article (2) of this Resolution shall be applicable to the brokerage companies licensed to provide custodial services in accordance with the Minister of Commerce and Agriculture's, Resolution No. 2/1995 with respect to the services provided by the brokerage services at the Bahrain Stock Exchange.

      • Article (6)

        The Director of Bahrain Stock Exchange shall implement the provisions of this Resolution, which shall take effect from the date of issuance and shall be published in the Official Gazette.

        Minister of Commerce and Industry and
        Chairman of the Bahrain Stock Exchange

        Issued on 8 Thu Al Higgah 1422 H
        Corresponding to 20 February 2002

    • Resolution No. (2) of 2000, in Respect of Organizing the Companies Managing Portfolios and Financial Institutions Attending the General Assembly Meetings of Listed Joint Stock Companies

      The Minister of Commerce:

      After perusal of Decree Law No. (28) of 1975, pertaining to the issuance of the Commercial Companies Law and its Amendments, specifically Article (173);
      And Decree Law No. (4) of 1987, in respect of the establishment and organization of the Bahrain Stock Exchange;
      And the Minister of Commerce & Agriculture's No. (13) of 1988, concerning the issuance of the Bahrain Stock Exchange's Internal Regulation and its amendments;
      And the Minister of Commerce & Agriculture's Resolution No. (2) of 1995, in respect of services rendered by brokerage companies on the Bahrain Stock Exchange;
      And upon the submission of the Director of the Bahrain Stock Exchange;

      RESOLVED AS FOLLOWS:

      • Article One

        Brokerage companies and financial institutions which manage investment portfolios shall have no right to attend general assembly meetings of the listed joint stock companies and vote on behalf of the securities in the portfolios management by them, except with written proxies issued by the securities owners.

      • Article Two

        The aforementioned proxy instrument must be issued by the securities owner or his duly authorized attorney. If the securities owner is a corporation, the proxy must be signed by an authorized person or an attorney of the company and duly stamped with the company seal. The concerned brokerage companies and financial institutions shall not vote in the general assembly meetings on the basis of general unspecified proxies, or on the basis of the general wording of the portfolio management agreements.

      • Article Three

        The concerned brokerage companies and financial institutions should request the registrar of shares to send them copies of the proxy cards equal to the number of their investment portfolio accounts at least two weeks before the date of the general assembly meeting. The registrar of shares must send to these companies and institutions the required cards immediately following the publication of the notice for the general assembly meeting.

      • Article Four

        The concerned brokerage companies and financial institutions must forward to the shareholders the proxy cards referred to in the above Article, with the notification of the date of the general assembly meeting and the agenda at least 15 days before the date of the meeting.

        The owner of the securities has the right to attend the general assembly meeting and vote personally, or appoint a brokerage company or any other person to vote on his behalf, in accordance with the Memorandum and Articles of Association of the company. In all cases, the proxy shall be signed by the securities owner and returned to the said brokerage company.

        The concerned brokerage company or financial institution shall undertake to transfer securities ownership from the portfolio to the securities owner, if he decided to attend the general assembly meeting personally.

      • Article Five

        A Global Depository Receipt (GDR) issued by listed joint stock companies shall have no right to vote in the general assembly meetings of those companies, unless such GDRs are transferred into ordinary shares, in accordance with the related prospectus. The securities represented by the GDRs shall not be taken into account when calculating the quorum.

      • Article Six

        Voting in the general assembly meetings of the investment funds on behalf of the unit holders shall take place in accordance with the provisions of the Commercial Companies Law referred to above.

      • Article Seven

        The Undersecretary of the Ministry of Commerce shall implement this Resolution, with effect from the date of its publication in the Official Gazette.

        Minister of Commerce & Agriculture
        Ali Saleh Al Saleh

        Issued on 3 Thel Quodah 1420 H
        Corresponding to 8th February 2000

    • Resolution No. (4) of 1999 Amending Certain Provisions of the Bahrain Stock Exchange's Internal Regulation

      The Minister of Commerce:

      After perusal of Decree Law No. (4) of 1987, pertaining to the establishment and organization of the Bahrain Stock Exchange;
      And Article (166) of the Commercial Companies Law, issued by Decree Law No. (28) of 1975 and its amendments;
      And the Internal Regulation of the Bahrain Stock Exchange, issued by the Minister of Commerce & Agriculture's Resolution No. (13) of 1988;
      And upon the submission of the Director of the Bahrain Stock Exchange;

      RESOLVED AS FOLLOWS:

      • Article One

        As an exception to Article (16) (Secondly) Clause (1) of the Internal Regulation of the Bahrain Stock Exchange, permission may be given to foreign brokerage companies to undertake the business of securities brokerage or market making at the Exchange, provided that the concerned company has distinguished expertise in securities, which will enhance the securities profession at the Exchange, add international dimension to it and contribute towards attracting foreign investors.

        The conditions for the admission of the Bahraini companies in the membership of the Exchange, as stipulated in Article (16) (Secondly) of the Exchange's Internal Regulation shall be applied to foreign brokerage companies, in addition to any other conditions specified by the Exchange's Board of Directors

        As an exception to Article (16) (Firstly) Clause (1) of the Bahrain Stock Exchange's Internal Regulation, permission may be granted to non-Bahrainis who are experienced in the brokerage field to be employed in a licensed brokerage or market making company on the Exchange, and the same conditions stipulated in Article (16) (Firstly) of the Exchange's Internal Regulation for the admission of individual persons, either as a broker or market maker, as well as any other conditions specified by the Exchange's Board of Directors, shall be applied to them.

      • Article Two

        Clauses (12) and (13) of Article (39), and Clause (5) of Article (40) of the Bahrain Stock Exchange's Internal Regulation shall be replaced with the following texts:

        Article (39):

        12. The company shall issue annual financial reports and audited financial accounts, within three months of the company's year-end.
        13. The company's ordinary general assembly shall be held at least once a year, within the three months following the company's financial year-end.

        Article (40):

        4. The company shall issue annual financial reports and audited final accounts within the three months following the company's financial year-end.

      • Article Three

        Clause (13) of the joint stock companies listing agreement and Clause (13) of acceptance of the joint stock companies for trading, as stated in the Exchange's Internal Regulation, shall be replaced with the following texts:

        Listing Agreement of Joint Stock Companies

        14. Issuance of annual financial reports and audited final accounts within three months of the company's financial year-end.

        Acceptance of Joint Stock Companies for Trading Agreement

        13. Issuance of annual financial reports and accounts within three months of the company's financial year-end.

      • Article Four

        The Director of the Bahrain Stock Exchange shall execute this Resolution, which shall come into effect from the date of its publication in the Official Gazette.

        The Minister of Commerce

        Issued on 4 Jamada Al Akhra 1420 H
        Corresponding to 14th September 1999

    • Resolution No. (2) of 1995 in Respect of Services Offered by Brokerage Companies on the Bahrain Stock Exchange

      The Minister of Commerce and Agriculture and Chairman of the Exchange's Board of Directors:

      After perusal of Amiri Decree No. (4) of 1987, pertaining to the establishment and organization of the Bahrain Stock Exchange;
      And the Minister of Commerce and Agriculture's Resolution No. (13) of 1988, concerning the issuance of the Bahrain Stock Exchange's Internal Regulations and its Amendments;
      And upon the proposal of the Bahrain Stock Exchange's Board of Directors;

      RESOLVED AS FOLLOWS:

      • Article One

        Securities brokerage companies which are licensed in accordance with the rules and conditions prescribed in the Bahrain Stock Exchange's Internal Regulation, may perform the following services:

        1. To provide brokerage services in local, Gulf Cooperation Council (GCC) States and international securities listed on the Bahrain Stock Exchange.
        2. To deal directly for their own account in listed securities, in accordance with the Exchange's rules.
        3. To offer consultancy services, or to deal on behalf of clients, whether local or foreigners, on the Bahrain Stock Exchange.
        4. To offer consultancy services, or to deal on behalf of clients, whether local or foreigners, on other bourses outside Bahrain.
        5. To offer custodial services.

      • Article Two

        Brokerage companies referred to in the above-mentioned Article shall comply with the following conditions:

        1. The capital of the company shall not be less than BD350,000, or the equivalent in foreign currencies.
        2. The company shall provide a valid guarantee of not less than BD50,000, or the equivalent in foreign currencies, with a local bank in favor of the Exchange.
        3. The company shall have a comprehensive accounting and administrative system and records for registering all of the company's transactions.
        4. The company shall have an external auditor.
        5. The company shall prepare the annual financial reports and final audited accounts within the first three months of each financial year's end.
        6. The company shall have agreements with the clients in whose names the company deals in securities and financial instruments.

      • Article Three

        The Director of the Bahrain Stock Exchange shall implement this Resolution, which shall come into effect from the date of its publication in the Official Gazette.

        Minister of Commerce and Agriculture
        Chairman of the Board of Directors of the
        Bahrain Stock Exchange

        Issued on 2 Thee Al Qudah 1415 H
        Corresponding to 1st April 1995

  • BHB Fees & Commissions Resolution

    1- Resolution No. (1) of 2000, in respect of the brokers commission at the Bahrain Stock Exchange.
    2- Amended Fees as per the Exchange's Board of Director's Resolution No. 2/66/98:
    a- Table of charges.
    b- Table of Commissions.
    3- Costs of the CDS Services.
    4- Custodians and Remote Trading Fees.

    • Resolution No. (2) of 2016 in Respect of T-bills Fees (Arabic)

      Click here to download the Arabic version of Resolution No. 2 of 2016 in PDF format.

    • Resolution No. (4) of 2015 with Respect to REIT Fees (Arabic)

      Click here to download the Arabic version of Resolution No. 4 of 2015 in PDF format.

    • Resolution No. (9) of 2011 in Respect of Listing Fees Amendment (Arabic)

      Click here to download the Arabic version of Resolution No. 9 of 2011 in PDF format.

    • Resolution No. (14) of 2006 Amending of BHB'S Commissions on Exceptional Cases

      Click here to download Resolution No. 14 of 2006 in PDF format.

    • Resolution No. (4) of 2006 in respect of Brokerage Fee (Arabic)

      Click here to download the Arabic version of Resolution No. 4 of 2006 in PDF format.

    • Listing Fees

      The Exchange's Fees as Amended by The Board's Resolution No. 2/66/98

      Type Fees
      Central Depository System (CDS) Registration* Annual Subscription
      Local Joint Stock Companies and Joint Stock Exempted Companies - 0.0125% of the first BD15 million of the company's paid-up capital with a min. BD1,000/-
      - 0.00625% of the amount exceeding BD15 million of the company's paid-up capital with a max. gross fees BD4,000/-
      0.1% of the company's paid-up capital. With a max. amount of BD15,000/-and a min. amount of BD5,000/-. - 0.1% of the first BD10 million of the company's paid-up capital, with a min. BD 3,000/-.
      - 0.05% of the amount exceeding BD10 million up to BD 50 million.
      - 0.025% of the amount exceeding BD50 million, with a max. amount of BD20,000/-
      Foreign Companies Nil 0.1% of the company's paid-up capital, with a max. amount of BD 15,000/- and a min. amount of BD 5,000/-. 50% of the Bahraini shareholding company.
      Local Closed Companies Nil BD 1,000 paid once only - 0.025% of the first BD 5 million of the company's paid-up, with min. BD 1,000/- - 0.025% of the amount exceeding BD 0.5 million, with a max. amount BD5000/-.
      Transfer Agents Nil BD500/- BD1,000/-
      Individual Brokers Nil BD500/- BD250/-
      Brokerage Firms Nil BD1,000/- BD500/-
      Mutual Funds Nil BD300/- BD250/-
      Bonds Nil BD1,000/- BD500/-
      Currency Warrants Nil BD250/- paid once only Nil
      •  The registration fee should be paid once.
      •  The Central Depository fees should be paid annually

      * Amended by Resolution No. 1/2002.

    • Costs of the Clearing, Settlement & Central Depository's (CSD) Services Schedule

      Service Cost
      1.Entry of investors' particulars into the CSD system. BD4 payable once.
      2.Opening the investors' account and depositing the securities with one broker. BD1.
      3. Transfer of securities other than exempted transfers. BD1 per company.
      4. Trading commission Subject to the Minister of Commerce's Resolution No. 3/2001 with respect to the Broker's Commission on the BSE **.
      5.Exempted transfers Subject to Article (36) of the Internal Regulations as amended by the Minister of Commerce & Agriculture's Resolution No. 8/1993 with respect to the amendment of some provisions of the Internal Regulations ***.
      6. Pledging and freezing of securities (except margin transfers). 0.00025 of the pledged securities market value, with a minimum of 5% for a single transaction and a maximum of BD2000.
      7. Letter of deposited securities ownership. BD1.
      8.Adhoc account statements regarding the transactions. BD2 per statement, not exceeding two pages and an addition BD1 per each additional page.
      9.Issuance of deposited securities accounts statements in the CSD system, subject to the issuer's request. 20 fils per shareholder at a minimum of BD50 in case the statement is issued on a CD, and a minimum of BD100 in case the statement is issued as hard copies.
      10.Management of shareholders' register. 500 fils per shareholder per annum at a minimum of BD2000 and a maximum of BD10,000 per company.

      •  The total number of shareholders in joint stock companies listed on the BSE as of 30/9/2001 is 96,447shareholders.

      Attachments:

      ** The Minister of Commerce & Industry's Resolution No. 3/2001

      *** The Minister of Commerce & Agriculture's Resolution No. 8/1993

    • Custodian Fees

      Resolution No. 2/2002

      Listing (BD) Annual Maintenance (BD)
      1000 500

      Remote Trading Fees

      Resolution No. 6/2001

      The Exchange shall charge the brokerage companies licenced to provide Remote Trading service a monthly Licensing fee BD150.000 (one hundred and fifty Bahraini Dinar). The Exchange may review this monthly fee at its discretion.

    Back to top